My rear wheel is slightly out-of-round. Not enough to be a problem meaning not noticeable when riding but saw it when on repair stand. Now it will bug me knowing its there. What is the conditioned called and how do you fix it?

search the forum for how to true a wheel. Or how to align a wheel.Out of roundness comes in 2 basic forms, side to side wobble and radial error, ie. high or low spots.

Both problems are corrected by turning the nipples to lengthen or shorten spokes according to which way you need to move the rim. This sounds more simple than it actually is, though it isn'y all that hard either. The goal is to achieve an aligned wheel, while keeping as little variation in spoke tension as possible. So there's some learned skill involved.

Your wheel is out of true radially. The usual condition is for a wheel to go out of true laterally, but when building a wheel or left untrued for a while, a wheel can go out of true radially. You will need to have the wheel trued or do it yourself. There are plenty of tutorials available regarding wheel truing. But usually, for the money, it's easier to have a shop do it.

Out of round is more difficult to resolve, as it typically involves balancing tension in multiple spokes, sometimes those opposite the ones at the out of round point. If not careful one can introduce low spots in fixing a high spot. In addition a low spot may require physically pulling the rim out.

Before you start playing with the spokes, make sure it's not because the tire isn't evenly seated on the rim.

This is a fact. If it is not significant, leave it alone. Most bike shops don't have anybody good at building wheels and a radial fix is not the best thing to start on if you've never trued a wheel before.

A mm or so is fine. It's far more likely you will make the tension uneven which will just lead to the wheel getting out of true more frequently as time passes.

If you do it yourself the way to go is to loosen all of the spokes 2 turns and retrue the wheel. At first pay more attention to radial true and as tension increases worry about the lateral true, then bring up the tension as necessary. I shoot for .5mm or less radial run out.
This assumes that the wheel was not knocked out of true in a crash.

I recently traced an out-of-round wheel to a tire that was bulged in one area.

+1. Check the wheel with the tire off before adjusting anything.