Hmm... It appears word treats your separate documents(but for the mail merge fields) as each a separate job when you go to print from "finish mail merge" so once ONE job is printed, on half of a sheet, word calls it a job done, spits out the sheet then moves on to the next job and sheet of paper...
whereas, when selecting "edit individual..." from "finish mail merge" Word treats all separate documents as ONE job, and spits them out across all halves of your two-per-sheet specification.
Did I get this right? Is there a simpler way of seeing it? Seems a little confusing so maybe someone else has an easier way of setting this up, but I guess I've solved my problem.