I just want to replace /<form[.*]?*\/form>/ with the word "block"

Well, there's your first huge mistake (apart from the question whether this is a good idea). You're now looking for "<form", followed by any number of occurrences of either "." or "*", and ending in "/form>". Or, it would if you put in your quantifiers in the correct way:

/<form[.*]*?\/form>/
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It makes sense that it finds nothing.

Where does the idea come from to use square brackets, anyway? Uh, yes, "." is indeed a plain character in a character class. That might be an unexpected pitfall.

So, try again with

/<form.*?\/form>/s
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The /s is to treat newlines as plain characters in /./s. (You put it after the third slash in s/PAT/REPL/s.)