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Thanks for using Just Answer. Which version of MS Office (Word) are you using?
Thanks for letting me know. Let me help you out.\
The double spacing in the Address Block probably occurs when we have the normal paragraph style formatted to have a space before or after it.
I would suggest that you do not use the Address Block. Instead, just insert the required merge fields in the configuration that you want them. You can then choose to have all of the components of the address in a singleparagraph with a new line separating each of them rather than each item being in its own paragraph.
You can also try using paragraphs and then remove spaces after paragraph.
Please let me know if this helped.