How do I modify the 'Format' dropdown in CKEditor?

Nick is right. You shouldn't touch the source folder. Just use the config.js file located in ckeditor root. Also refer to the CKEditor API page for further customization options and the developer guides here.

You should edit your config file, not the plugin file.

Should be in the root of the ckeditor folder, config.js

Should start with:

CKEDITOR.editorConfig = function( config )
{

So you would want to add this to it (after the above, but before the closing }):

config.format_tags = 'h1;h2;div;p';