Sloths

I like the image of a sloth with a butterfly aura as well. I looked it up as well and apparently three-toed sloths can carry up to 120 moths in their fur, the whole group feeding on everything within. And if we consider that a ground sloth is about 10 times bigger than current sloths we're looking at roughly 1200 moths. Or let's say roughly 1000 butterflies since they're a little bigger.
That's quite an aura, it's enough for a full out swarm attack.

The larvae living in the dung of sloths can still work. The butterflies live off the sloth's fur, they lay their eggs in the dung of the beast, the larvae become butterflies and attach themselves to the first sloth they can find. The butterflies respond very aggressively to any threat to their buffet and the sloth is very protective of his groomers, without them his fur would become infested with all kinds of weird things very quickly.
The butterflies themselves are quite valuable in alchemical creations. Maybe they're used to make healing potions? Or maybe in poisons?
People have discovered that they can capture roughly half of a sloth's swarm and it will 'grow' back within two years. Taking more than that will increase the time to 4 years, lowering the yields. Capturing butterflies is extremely dangerous: you can't kill the sloth or you risk destroying a valuable asset and the sloth will react very violently to any attack on him or his swarm.
It's a slow walking plot hook!

Mermaids & Blackbeard's Island

Massive 2000ft long mermaids? Interesting.....

Alright let's board the crazy idea train here: Mermaids are like bees. They have one massive 2000ft long queen. That queen gives birth to all of the mermaids and mermen that serve her. If the queen dies, the rest of them dies within a couple of months.
The mermen are the mindless workers, they provide the food for the queen and the mermaids. And they mate with the queen.
The mermaids are the warriors, warlocks, craftswomen,.... Basically every other job apart from providing food and mating.

As for Blackbeard's Island: Blackbeard either 'captured' the queen and is holding her hostage with some sort of weapon aimed at her brain or whatever.
Or he somehow gained her loyalty/friendship/servitude/.... in a peacfull way. He now controls the queen and her whole 'beehive'.
Maybe the queen 'wears' the city like some sort of item of clothing, it's not attached to her skin.

Nations

Heartland
I agree with keeping the mound builder culture alive. I just assumed it was going to be dominated by Cahokia, they're already such an imporant faction in the setting. And they control Nouveau Orléans, it would be very unrealistic for them to control two cities so far apart and nothing in between.
Oh, and i wouldn't want to see the Cahokian Gunboats disappear.

Plains
What if they united over something from the north, from the subarctic region for wich we don't have anything yet?
An outbreak of Lycanthropy among the wild Tuniit that live there? An invasion of a massive wave of undead creatures coming from Alaska? (might be too similar to Warcraft 3)