In Word and Excel this only changes the zoom level, not the size of the type. This is a quick shortcut when you want to check your whole page layout or read some fine print.
If it actually made the font smaller every click of the wheel would require the entire document to reflow (more words on a line and page, change in total number of pages). The complexity is increased when it has to change the point size of headlines from 24 to 21.6 (which Truetype doesn't support) and body separately from 10 to 9 pt. That would take too long for even hardened Windows users to tolerate regularly. Plus, it would not be accurately reversible (especially on another computer), so every time you look at your page, the layout is different.
