Becca,
Don't panic! Let's try to tackle these questions in order.
About the different colors: this is something that Sigil - and many other coding programs - do to help you keep track of which HTML tags are currently open and closed. The text that will appear on your final page will be displayed in black; anything colored indicates an HTML/CSS tag.
About markup from a Word document: Yeah, unfortunately Word tends to leave a lot of gibberish within a document if you try to import it into other programs. The tags you're seeing probably indicate what is the style of the font (bold, italic, etc.), what color it is, what font type it is using, and so on; but without seeing the document itself I'm afraid I can't help you much as to the specifics.
Is this a long document, though? You may find it's faster to just try to reproduce how it looks yourself in Sigil's "page view" editor, or (if you have a little more time, and think you might want to do this again in the future) try to dip your toes into the wild world of HTML/CSS code - it's not as hard as it looks! There are many good sites that can get you started; the walkthroughs on W3Schools.com are generally pretty decent, and this forum can certainly help you out as well.
Hope that helps!