Photoshop :: Text Wrappable Non Square Pictures

I am trying to create a document in Word that has "boxes" of text, peripheral to the main content, scattered through the text body. First, I want these areas of text to be circles and I want the text to wrap around them like it does the ovals you can create with the Word drawing tools.

The next thing I want is for the text inside these areas to conform to the internal shape of the circle.

My 1st problem is that any circle I create in photoshop, when inserted into the word document, has a square bounding box that the text wraps to. I can't seem to figure out how to save the photoshop picture so that it only contains the circular graphic, although I don't know if it is photoshop applying the square background or Word when I import the picture.

My 2nd problem is trying to fit the text within the graphic so that it fills it, wrapping to the inside border without manually adjusting every line and word. If there is some automated step I can use to achieve this I would love to know what it is.