haha - the Merchant was awesome...BUT the rest of RE4 was great, you had set pieces mixed with horror and by the time you got to the Merchant you knew you'd completed that area; maybe time to take a break? Set up your guns/ammo.
RE5 is just crap in comparison, from top to bottom. Its poorly designed and when your finishing an area your pretty much wanting to 'get it over with'; so having the Merchant as some sort of relief doesn't really work. RE4 is just an overall better game, the shop and items system is hugely key to this; the next two games threw this out the window. The merchant lost his place
I always thought the merchant was infected; but was just too capitalist to fight for a ruler; he was selling Saddler's own weapons and stock piles to you just because he liked gold (maybe ate it or just hoarded it). Thats my lore anyways