I'm reading this as a bug report? Therefore wondering why it's it General Forum... I'll move it, let me know if I've misinterpreted the thread intent.
Could be a new idea, could be a discussion piece, I really don't know...Please place forum threads appropriately in the future, whichever the intention.
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What errors? For doing what? Please state examples, then they can be either explained or resolved.
Font is easy enough, but yeah, as Aeo said requires a couple bits of html, the issue as stated is that there's no drop down option on the design view with some preset font options, rather than there being no way to change the font.
The style droplists, change the style...as the name might suggest. Highlight the text, select the styles and see how the text changes.
The paragraph droplist changes the paragraph breaks and font size (Heading 1=big main heading/title, Heading 6=minor heading/title), again, highlight specific texts, or place the cursor on the line you wish to affect, and play with the settings.
They do both very much do things, have a play and discover.
Until looking into this part of your post, and I clicked on the options (Haven't edited my papers properly in a while) I had no idea you were trying to file a bug report. These features used to work, something has clearly changed at some point which broke these tools. For the record, the error message is huge to post here, but it's replicable. Picture highlights specifically which tools encounter this/an error.
[attachment=4492:Papers bug.png]
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As a temporary for changing colour and size of text;
<font color="red">This is some text!</font>
<font size="5">Here is a size 5 font</font>
<font color="red" size="5">Here is some red size 5 text</font>
There are more specific, and better/different ways to do the same job, but I find that to be the easiest to understand at first glance.
Note: The format does change to the following automatically, enter either in initially as preference dictates;
<span style="color: red;">This is some text!</span>
<span style="font-size: large;">Here is a size 5 font</span>
<span style="color: red; font-size: large;">This is some text!</span>