One problem at a time. You mention two different problems in this thread; inserting the addresses and printing the letters and ( I assume ) printing the stick-on address labels for the envelopes.
Creating the database records:
1. You'll need at least two 'layouts': one for entering the data and one for printing the labels. If you used the templates for the correct Avery label, it should be the correct
size. I assume that you have already created the printing layout version. The 'sliding up' problem may be as simple as selecting
all the fields and selecting that option. Sometimes it helps to have more than just the field you want to slide selected. Second, make sure there are no other objects on the layout except the 4 lines. A simple 'line' that may not have been formatted to 'move up' can prevent anything below it from doing so.
2. Use the "Preview" mode to check that things look correct as far as sliding. Also make sure you have selected the correct printer and paper margins in the "Page Setup..." menu. If the fields are sliding correctly, print a one page sample on blank paper to check alignment with the Avery page.
3. Just for grins, save a 'text' version of your database, exporting the fields you will be needing for your letter. If you have a tab or space delimited option, use it. Label that file so you can easily find it later.
Inserting the addresses into a 'form' letter.
1. Create the form letter but without any 'real' names, addresses.
2. At some point, you must somehow communicate to the letter writing/printing portion of AW where to find the info you want it to insert. It can be the actual database you used to print the labels but most word processing apps can use any simple, correctly formatted text list. The exported list in step 3 above is really all you need but you can probably also select the actual database file.
At any rate, you must already know how to select the info file before you can use it to fill the placeholders in the form letter.
3. In place of actual names/addresses in the form letter, you should insert what are usually called "Merge" placeholders. What gets shown on the screen will probably be something like: "Dear <salutation>[space]<first_name>[space]<last_name>". ( Where "salutation", "first_name", etc. are the names of the fields in the database. )
4. Print using the 'batch' printing menu. This will print all the letters while substituting the names/addresses from the database file. In my word processor, the letters are simply sent to the printer faster than I could possibly read them even if they were displayed on screen, AW may work differently, I dunno.
Since you're trying to get the addresses into a text document ( a letter ), the 'layouts' for the address database are irrelevant when in the letter composing mode. Those are only useful when printing out the labels on the Avery sheets. I usually have two ( or more ), completely different 'layouts' for entering data and printing various reports/labels.
If you are still having trouble, it may be easier to address them separately, that is, the 'sliding' problem and the 'form letter problem.