This lead too much head scratching at the time. You'd think there would be a simple way of converting the word doc to kindle using some sort of step by step program with lots of 'next' buttons. But for some reason there wasn't and after a few weeks of on off trawling of the internet, I found out that the KDP site doesn't actually like word docs, instead it wants you to use HTML, and apparently word docs don't convert into HTML very well even if you attempt to save them as HTML files. The result was the same, readable text but too small and not aligned correctly. Hardly a great experience for someone reading the book.
The solution at last presented itself on a discussion page. Don't create a mobi file using calibre, create an epub file instead. Then use the kindle previewer to open the epub file and it automatically converts into a mobi file. This is a mobi file that is compatible with KDP, does look good, is the a good size, is aligned correctly and if you have created a Table Of Contents it puts in Chapter breaks which you can use the arrow keys on your Kindle to navigate. So, got there in the end, but well aware that I may need a different solution in the future. All things being equal KDP may change in time.