How do you know that John Smith and Mary Smith are the same household instead of being two unrelated people who happen to share the last name? What if Mary kept her maiden name so they are the same household but their names are John Smith and Mary Jones?
If I was you I would concatenate every name that goes to the same mailing address so it looks something like "John Smith & Mary Smith," grab that list and move it to a separate list, and then remove duplicates, and feed that into mailmerge.
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