To me (and most people), “text file” means plain text, .txt files. The term for what .rtf, .doc, and .docx files are is “word processing” (though .rtf can also be called “rich text”). The latter are all binary file formats, while text editors are exclusively for .txt (and configuration files and source code). Runestone is strictly for plain text, while Pages should do a decent enough job of handling word processing. That said, .docx isn’t its native format, which has the potential to make things trickier when it comes to file associations on iOS*. If you’re in Files and are looking at the document, you can always tap and hold then select the Share option. That said, it’s possible that that might not work, depends on how Pages’s file associations are set up (if you have to import a document from another format, sometimes there are hoops to jump through, such as opening the app first and selecting import in a menu**).
* Course, depending on the screen size of your iPad (it’s a weird Microsoft policy), you could try using Word. I don’t know if Word uses the system file browser at all, but I’d be really surprised (and disappointed in Microsoft, yet again) if it couldn’t open .docx files from Files. Below a certain screen size, you get editing for free, above that, you have to pay for an Office 365 subscription. (At least, that’s how it was the last time I looked into this. The screen size policy could have changed in the meanwhile.)
** But that’s hardly unique to iOS, I’ve definitely seen similar setups on macOS and Windows, let alone Linux.
Edit: The primary difference between “plain text” and “word processing” is that the latter supports formatted text (bold, italic, etc., multiple fonts) and might even support in-line photos and videos. Plain text is pretty much exclusively monospaced ASCII (and maybe UTF-8 these days).
