fbx89, in my experience MS Word has always been backwards compatible with earlier Word documents as per the example below.
I'm using the same version of MS Word as you, 16;78
Note; the default application in the Info Window is always set to open these types of files with MS Word.
At the bottom of the same window also check that Permissions are set to allow you to Read & Write.
As far as I can see there is no need to "convert" the .doc to .docx but if you did wish to do so you can simply choose the .docx format in the File > Save As Menu.
So, right click on the doc in a finder window and select Get Info and check that MS Word is set to open that and all files same as that. Let us know what happens.