When Google first introduced the ability to attach files from Drive directly in Gmail, it originally only supported sharing links. Now, you can attach the files directly.
The default option for Word when opening attachments from Outlook is to display them in Reading View — which to be honest is not the way you want to look at most documents when you’re reviewing them. Fortunately, you can switch this off.
It’s actually surprising this took so long: you can now attach files stored in Google Drive directly to an email within Gmail. That enables the attachment of much larger files (up to 10GB).