I have 3 layers of object relationships -- Opportunities, Rooms and Passengers. Rooms are directly associated to an Opportunity (1-to-many) and there are many passengers in each room.
For each Room in an Opportunity, I need to generate the same templated document but a separate output file per room (not running list in one file). Is this possible, and if so, how do I setup the DDP to make this happen? Do I need mass merge or is this possible in the Business edition?
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Since you are looking to get a separate file per room I think doing MASS from a Related List (you'll need a javscript button to do this) would probably be the best solution here. If you were willing to have all the rooms come into the same document but have a single page for each room (depending on how your document was formatted) you could achieve something very close by doing table replication on the entire page and row replication on the passengers.
So it is possible to get very close to your desired output with just Business but to do exactly what you are looking for you will need MASS. I've included some documentation on MASS, Table and Row Replication below.
Table and Row Replication:http://help.nintex.com/en-US/docgen/docservices/#LOOP%20Document%20Services/Replication%20in%20Word....