OK, some progress.
Re annotating WORD docs.
- You can't do this directly
- but yo can install a convertor to PDF to enable this to happen.
Mary has mentioned some software here: https://moodle.org/mod/forum/discuss.php?d=333814#p1344877
I've checked the docs there is a little bit here, https://docs.moodle.org/38/en/Assignment_FAQ#How_do_I_set_up_unoconv.3F but not a complete account.
Seems you need Ghostscript and unoconv. I imagine the files appear as a PDF in the marking screen.
Can anyone confirm this?
EDIT: just found a link: https://docs.moodle.org/38/en/Document_converters