Sorry, I am not sure I understand. PDF tags are accessibility markups that, when properly applied, help to optimize the reading experience of those who use screen readers and other assistive technology. You can view the tags in Acrobat Pro by opening the Tags pane. It sounds like the problem you are having is with internal links that should make your Table of Contents clickable, so that you can click and jump to the referenced content. Is that correct? If so, was the "Add Links" box checked when you converted the document (it is shown as checked in your post).
You are correct, I'm trying to add internal links to make the Table of Contents clickable. Yes, the Add links box was checked when I did the convert but it is not creating internal links in the document.
So thanks to a C student pointing me in the right direction I found the answer to this issue. Acrobat keys off the Word Table of Contents to create clickable items. So you have to go into Word and go to (I'm using Word 2007 in this example) References > Table of Contents > Add Table of Contents. I'm doing this from memory so the steps might be slightly off. Then you have to select the settings as shown below to and when the PDF is created it will create a clickable table of contents. This is what worked for me. Good luck to anyone else.