How do I make changes to the default template?
I would like to make some formatting changes to the default template in changes.
How do I go about doing that?
You cannot make changes to the default template as it is part of the Pages application. What you can do is create a new document using the default template, make your improvements, save as a Pages document, and then File Save As Template… and give it a new name (e.g. mydefault).
If you always want to default to using your new custom template, then in Pages Preferences, you can change the standard Show Template Chooser, to Use Template, and then pick your new mydefault template. If you do not want your mydefault template used everytime you launch Pages, then do not change this preference setting, but pick your mydefault template from the My Templates section of the Template Chooser.