In order to create a link from within a block of text, the text needs to be in rich text mode. By default, many of the blocks of text will be plain text. If you select a single word and try to link to it, it will beep at you. To put a block of text into rich text mode, select it then go to the "Modify" menu and select "Rich Text Formatting". You should then be able to select individual words and link to them. Also, when publishing the site it needs to be built as Dynamic HTML in order for the links to function.