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Hi Charles,
I believe so, since I selected my Custom Theme from the Themes drop-down menu in the Document Formatting group on the Design tab before I started modifying and creating new styles. I added some screenshots in my response to Stefan to show I how I did this, in case I'm missing a step.
I am aware that I'll need to share the .thmx file with my Custom Theme settings with other users once I'm ready to make my templates available to the rest of my team. However, I know that my theme file is working to the degree that I can open a new document in Word based on the Normal.dotm template and select my Theme colours to use in that new document even if I'm not using custom or modified styles.
As I mentioned in my reply to Tin Zhang, I have to confirm with my manager whether I can share my template file (and how) in a way that doesn't contravene my company's security policies.
Hopefully that clarifies a little bit more of my process in the absence of being able to share my template file.
OK
You should use your theme colors and fonts in most of your styles, IMO. This will make fine-tuning things far easier. Your styles should likely be saved in a \[Quick\] Style Set, although that requires that they all be in the Quick Styles Gallery.
Where appropriate, do use the built-in styles, especially the heading styles, but make sure your documents/templates are not set to update from the template. Why Use Word's Built-In Heading Styles? by Shauna Kelly