One of my issues was with the first letter of a few sentences not being capitalized. When I looked at the sentence structure for these facts, I discovered that the 'person' field wasn't capitalized in the template:
[person] lived< [PlaceDetails:Plain]>< [Place]>< [Date]>.When I capitalized the 'Person' field, then the sentence began with a capital letter in the narrative report.
According to the forum discussion, the capitalization of the 'person' field should not affect the sentences. Thus, I didn't go thru my various fact types and change all of the [person] fields to [Person]. I'm guessing that I did something to the sentence structure for these few sentences that kept them from formatting correctly. Since my 'work-around' (capitalizing the 'person' field in the template) is working, I'm not going to worry about the 'why' for now.
Another of my issues was spacing between sentences. In most cases, the report was putting one space between the superscripted footnote number and the start of the next sentence. However, in some cases, it was putting two spaces. I verified this inconsistency by opening the report in Word and using the OPTION to DISPLAY the formatting marks (spaces, paragraph returns, etc.). Once I verified the existence of the extra space, I was able to look at the sentence structure for that particular fact. I discovered that in the process of customizing the sentence structure, I had inadvertantly put in a blank space at the beginning of the sentence.
The formatting trick that I learned involved the creation of paragraphs. I played around with adding carriage returns to the beginning of a sentence where I wanted a new paragraph. This method worked but when there are a lot of facts, it would be difficult to figure out where these returns were without studying a narrative report.
Thus, I decided to try using the Paragraph fact type. I created a new fact type called Paragraph. For now, I have only selected to use this fact in Gedcom and Narrative Reports.