The problem is that you are not exporting the RDLC report to Word!!! The way to do that is as follows:
string mimeType;
string encoding;
string fileNameExtension;
string[] streams;
Warning[] warnings;
string deviceInfo =
"<deviceinfo>" +
" <outputformat>Word</outputformat>" +
" <pagewidth>8.5in</pagewidth>" +
" <pageheight>11in</pageheight>" +
" <margintop>0.5in</margintop>" +
" <marginleft>0.75in</marginleft>" +
" <marginright>0.5in</marginright>" +
" <marginbottom>0.5in</marginbottom>" +
"</deviceinfo>";
byte[] docContent = ReportViewer1.LocalReport.Render("Word", deviceInfo, out mimeType, out encoding, out fileNameExtension, out streams, out warnings);
And replace these lines in your code:
Response.Output.Write(sw.ToString());
Response.Flush();
Response.End();
by this one:
Response.BinaryWrite(docContent);