Yes, you have to use JS to change the contents.

Hi Tom--
Thanks for getting back to me!
I used this script to write a Loop & Merge variable to my Highlight Q placeholders ".":
Qualtrics.SurveyEngine.addOnReady(function () {
  var $this = jQuery(this.questionContainer);
var test_text = "${lm://Field/1}";
  var choices = test_text.split(" ");
  jQuery(".QuestionBody .HLTextWords .HLTextWord", $this).each(function (i) {
    jQuery(this).text(choicesxi].trim());
  });
});
However, as you can see from the below screenshot, "${lm://Field/1}" loses its formatting from being 4 paragraphs to all being joined together (and includes some html tags!) , AND there is a series of trailing "." HLTextWord "boxes".
Is there any way to remedy these two remaining issues?

https://community.qualtrics.com/XMcommunity/discussion/comment/42332#Comment_42332You should replace the

https://community.qualtrics.com/XMcommunity/discussion/comment/42332#Comment_42332Hi Graeme,
Thank you so much for sharing your code.
I also tried to incorporate the loop-and-merge sentences in the "edit this highlight text" field, and I used your JS code, but it does not work for me. In the preview it basically shows me a blank field and nothing to highlight. Can I ask you whether you somehow defined the Embedded data or did anything else besides this js code?
Thanks!

Hi OG--
I put the L&M sentences in the L&M field window(s)
I put periods separated by single spaces in the "edit this highlight text" field, i.e: . . . . . . . . . .
When I previewed I made sure I used "Preview" and not "Preview Block".
I was not able to do any formatting (carriage returns, etc.) nor hide the "extra' spans as Tom suggested, although I tried to, with the last line of the below code:
Sorry I can't be of more help!
(Screenshots below the code)
Qualtrics.SurveyEngine.addOnReady(function ()
  var $this = jQuery(this.questionContainer);
  var test_text = "${lm://Field/1}";
  var choices = test_text.split(" ");
  jQuery(".QuestionBody .HLTextWords .HLTextWord", $this).each(function (i) {
    if(choices�i]) { jQuery(this).text(choicesti].trim()); }
    else { jQuery(this).hide; }
  });
});

https://community.qualtrics.com/XMcommunity/discussion/comment/50250#Comment_50250__OG__ started a new thread and I answered the question:
https://community.qualtrics.com/XMcommunity/discussion/22423/highlight-question-and-loop-and-merge

Thanks a lot, both of you! Yes, indeed, TomG resolved my issue in a separate thread! Thanks!