You can use the commands on the song Edit and Format menus to change the formatting, add color, change text alignment, and more. Any text pasted in from a word processor should retain the formatting it had in the word processor, except for certain restricted features (tables and images, for instance).
The Auto Syntax Colorize option on the Format menu will evaluate the song contents and apply formatting you have selected in the Syntax Styles preferences. This command can help a musician quickly identify titles, lyrics, chords by making them a different color or format.