These are the steps to edit a mail merge template in Dynamics 365:
Go to the Settings cog in the top right-hand corner of Dynamics 365, then click Personalization Settings
In the Personalization Settings window that pops up, click Email Templates
You can then choose to view/edit your own personal templates or all email templates
Figure: Selection of which templates you want to view
Click on the name of the template that you want to edit, a window will pop up with the template details, OR click on New to create a new template
Edit, save, and close