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Just a point: This is NOT the place to go for legal experts. If you're serious about being commercially viable, contact an experienced intellectual property attorney. I'd be glad to refer you to an excellent one in the US, if that's where you are based.
Having said that, I've had to deal with these sorts of issues a fair bit in the course of building Iron Realms into what it is today.
Yes, it would absolutely be under the Merc license. You're using the Merc codebase to make the game/mini-game.
You can't copyright the fundamentals of a game. You can copyright or trademark/servicemark specifics, but the game design is beyond that protection.
--matt
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