Perl is very well-suited to doing text manipulations. A script to do this conversion might look something like this:

#!/usr/local/bin/perl -w

use strict;

$/  = 'SOUR';  # read in one record at a time
$^I = '.bak';  # modify input files in place, save originals with .bak

my %convert = (
  HEAL => 'Medical',
  HIST => 'Biography', 
  EDUC => 'Educated',
  RESI => 'Resided',
  OCCU => 'Occupation',
);

my $convert_re = join '|', keys %convert;
$convert_re = qr/\b($convert_re)\b/;

while (<>) {
  s/$convert_re/NOTE $convert{$1}:/g;

  s/1 NAME data/1 TITLE/;
  s/1 NAME data/1 TEXT/;
  s/1 NAME data/2 CONT/g;
} continue {
  print;
}
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I expect I haven't gotten that quite right. (Does '1 NAME data' appear in the file literally, or is that what certain strings in the file look like?) It would be very helpful to see a snippet of the input file. :) Anyway, that should get you started.