Merrill IS a blood mage. My Hawke never trusted her. Bethany was the best character in the game, IMHO, followed by Mr Exposition.
I just don't agree... The whole "who to support" thing gets ruined fairly quickly because they push all these abominations on you all the time. Basically, you have to do a story and gameplay separation in your head or you would never side with the mages, period, simply because the game, by utilizing these enemies and idiot-ball confrontations, does a show-and-tell that proves that all mages should be purged at birth, just to be sure (it doesn't matter if you try to help them, or talk to them, they "all" (99% of them) attack and use blood magic or turn into abominations after you have talked to them, or during, or attack you on sight).
The ONLY reason my Hawke stuck with siding with the mages (until my rage quit) was because Bethany was a mage.
Basically, to sum it up neatly, when playing DA2 I feel it like the writers are standing behind my back pointing and laughing at me: "Haha he tries to make a difference! How stupid and naive he is! Oh look! eveything he worked for went down the drain...! hahaha!!!"/