Hi there,
It's possible to create a Service to trigger an applescript but I can see a couple of issues with the scenario you describe. The first thing is that the selected phone number would need to be copied to the clipboard. As you may have multiple applications that you want to select numbers, the script would need to have a routine for each application (if it's apple scriptable). A work around for this could be to get the script to issue the command - c keystoke so regardless of what application you're in the selected text would be copied to the clipboard.
The second is that applescript dialogs only display text in one font size. You could display the formatted number in another application and increase its font size.
I'm happy to answer any questions and maybe put together a demo script if you would like.
Please do not accept my bid until all areas of you project can be met.
Many Thanks,
Nik