I think your last sentence may be the answer,
BTW, it's a Word (2003 PC) document I've opened in Pages if that helps any.
but I can't explain it. I just put it down to typical Microsoft differences.
I just opened a couple of Word documents I got from work in Pages. The font sizes ranged from 8 to 12 in both Arial & Times Roman. I applied several of the character styles to existing text. Almost all the character styles were 12 pt so the text became larger in the document even though the display of the character style in the styles drawer looked much smaller.
Fonts tend to display larger on a PC than on a Mac due to the default being 96 dpi on a PC & 72 dpi on a Mac. On my work PC, the default size for Arial is 10 points in both Outlook & Word (2003). If I forward an e-mail to my Mac the type is actually too small to comfortably read.