This is why people hate computers. The Common Application is basically lying to its users, because its developers are too lazy to handle a situation that is both easy to stumble into and can produce really bad results. And your solution? Put the burden on the user to work around the developers' laziness.
If the limit is 1000 characters, then tell the user it's 1000 characters. Don't say "150 words". And make sure that you really can fit 1000 characters on the printed version of the application 100% of the time. This really isn't that hard.