Sound like you need some counter spies in your own cities - they hekp kick out the enemy spies which are everywhere in this game.

As england on vh/vh i found it best to always keep some of my own spies in my frontline cities fopr this purpose.

To get priests to cardinals, send them through france to north africa to convert muslims, or to the east to convert pagans. Even better is to have a little "Kingdom of heaven" and send priests into egypt.

As for merchants they are hard to use, but as england I found that the amber deposits in scandi are worth approx 167 florins per turn. I always try and have a monopoly on the resources in the area and use the merchants guild to try and get them a little more effective.

Good luck!