Is the delay in the creation of the merged document, or in the loading/opening of the Data1-Client Info file in the first place?  (I suspect the first.)

If the slow-down is in the creation of the merged document, you may be able to set it up as a query (or limitation, range restriction, or some other terminology unique to Word) such that you are only processing <these 16 clients that you want to get the letter> rather than <my entire client list of 800+>.
 - For example, if they all share the same F4/status, you can look for field c1_g4 (current status).
 - Other useful limitations are: c1_g17 (preparer, on the signature line), c1_56(staff preparer), c1_g13 (person who initialed current status), and c1_25 (custom filter).

Also, if your source document for the merge already has things like watermarks & letterhead formatting [i.e. "things that make the file large"], you may benefit by keeping just the plain-text version to get merged in, and then adding the "pretty" bits after the pages exist.

Robert