A big update for Office for Mac is also supposed to be incoming soon. (as in, a major update like Office for Mac 2014 kind of major) I agree that the current stuff is kind of janky and it would be nice if it got fixed, though. My wife writes novels with it and tends to have 10+ documents open, which makes it freak out sometimes and totally stop working. Hopefully the new version will work a lot better, not be too expensive (hey, they released OneNote for free! you never know what's going to happen with them next), and not change the UI around too much.
I can't say specifically why she values using Word as her text editor of choice, due to not being in her head. I know she uses some features such as adding notes to pieces of text (which I know she uses to track what she needs to work on/revisit later, etc.), but I don't know how many of those features she uses or how many advanced features she touches.
I suspect a large part of the reason she sticks with it though is threefold: familiarity, volume of content in the Word format, and working with agents/publishers. (like another commenter mentioned) She's already familiar and comfortable with using Word, and so she can be productive and just get things done by sticking to what she knows. (she has expressed displeasure with the idea of upgrading due to possible UI changes) She has a /HUGE/ amount of stuff already written using Word, and moving that to anything else would be a herculean undertaking which is, honestly, not worth her time. And using an automated tool to attempt to do so could lose information, which she is already extremely protective of. Lastly, because she needs to work with other people, and might submit documents to those other people in a digital format, it basically needs to be in Word, otherwise that person is unlikely to ever even touch her stuff. Having to deal with agents as a writer is harsh, as they won't even tell you if you did anything wrong. They'll just ignore you. Submitting an unknown, uncomfortable format to those people will just cause them to ignore her anytime she tries to submit anything.
While you might consider plain text to be the ultimate format which is compatible and usable everywhere, people who are not tech people (my wife is not very "techy") just want to get things done with tools that are highly supported, comfortable for them, and widely recognized and used by the people they need to interact with. While you might consider VIM/Emacs/Sublime Text/<insert plain text editor here> to be the ultimate editing environment, anybody in the world my wife deals with will just give you a blank stare the moment you try to deal with those people using those tools.
> what does Word offer the novelist that a plain text (or rich text) editor would not?
It handles large documents efficiently, renders them nicely, and has a ton of features for working with large prose documents.
Plain text has no value to most users since they use no other tools that work with raw text. If you don't use git, grep, cat, find, diff, etc. there's no effective difference between binary in text: in both cases they are just a blob of bits you load into a program.
"It handles large documents efficiently" - and plain text doesn't? That's just an insanely bad reason to use word. Vim can open, edit and "handle" very large documents with ease. A typical novel - even one by Thomas Pynchon is trivially small for plain txt. At roughly 300k words for a long novel, 400k if you're Tolstoy, that's tiny.
Spell check maybe is a reason, no writer wants to admit they can't spell "Hemingway", maybe word/page count abilities, but large documents isn't a reason to forgo the benefits of plain text.
Most of the world doesn't want to deal with Vim's normal vs insert modes. Nor do they want to engage in a philosophical battle about proprietary formats vs plain text. Most people just want to get stuff done, and in this case, send their work to other writers in a recognizable form that they can easily read, edit, make comments on, etc. Word and other programs offer that to them. Plain text and Vim do not.
If you're working with a traditional publishing house, you almost have no choice at this point. I was able to get my wife into a text-only markdown-based format because I am responsible for the layout.
I'm not a novelist but I rather enjoy being able to annotate my work with the review features in Word. That's the primary benefit to me over a plain text editor. I would assume an author working with editors and such would find these features to be even more valuable.
