I got in-laws coming for the night, so I won't be doing any more than this and I gotta make this quick.
I'd say that the merchant will NOT feel the osanwe. He strikes me as egotistical and money-hungry enough to be pretty unperceptive in any but ego-feeding and materialistic ways. Same goes for all his cronies.
It's up to you what you want to do with merlocks. They wouldn't appear outside their own area of control unless by the will of Tharonwe, though; and therefore, they wouldn't do anything unless Tharonwe wanted it done, such as attacking. They're not about to attack the merchant and mercenary group, because they're already doing what Tharonwe wants. There's no point in having them attack the Ravion party right now, because the merchant & mercentary group serves that purpose.
By the by, you surprised me by having other merchants. I had imagined this as being 12 men-at-arms with 1 merchant and his bodyguard, but your "extra merchants" thing works fine - we just can't water down the number of armed mercenaries too much.
Gotta go!
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