In Photoshop [Option + Command + I] = Image Size. In here you can set the size of the image, and it's scaled to fit.
If you use your thumb on the Option + Command, just tilt your thumb and you're there, with two buttons down, super fast and easy.
Similarly, Canvas (the total size of the image are) can be changed without impacting the size of the content. The shortcut for this is [Option + Command + C].
I mention this because these two are actually logically named and have logical shortcuts. Making them easy to remember. These are two of very few features like this in Photoshop. And you're likely going to need it in a moment...
As to Word cropping the bottom of your image during the merge, this indicates there is both a width and a height limit in the Mail Merge. So you'll need to figure out what that is, and then adjust the Canvas size (and therefore image aspect ratio) accordingly.
If you resize the Image [Option + Command + I] and do the aspect change like that, you'll distort your content. Hence the reason to use Canvas once you know the ideal aspect ratio.
Aspect Ratio is the ratio between Width and Height.
Most commonly you'll hear it mentioned with regards TV/Video content.
16:9 = the most common (1920 * 1080) is the foundational HD 16:9 ratio.
Most designers prefer screens with 16:10 ratios, such as 1920 * 1200 or 2560 * 1600 or the 2880 * 1800 of the Retina Macbook Pros.
The iPad has a 3:2 ratio (2048 * 1536).