Heya, Bozo Smith, and welcome to Geeks to Go!
The answer to your first question is no, I believe. As far as I know a watermark will automatically place itself on every page in a document. Even creating a separate, one-page, document with a watermark to insert will (after insertion) place the watermark on every other page. Sorry.
As for your other question, you have to struggle pretty mightily to get a 20mb Word file. My guess is that you have all manor of pictures and charts in there. I can't see why 256mb of memory would struggle with it, but it is a large document that's fully loaded into memory.
If you're wanting to reduce the size of that file, you can try inserting the pictures in other formats. For example, if you're inserting bitmaps (.bmp) files, the Word file can get very large, very quickly (I've seen 60mb Excel files because of that). Try saving them as JPG files if you have that capability (scanning or picture editing software should have it). If not, it's not a bad thing to have a 20mb file, just remember it's going to take forever to email it anywhere.