Hi! Thanks for playing the game, I will try to clarify some things as best I can :)
1. Hmm, this would seem correct! As you can use any number of Treasures for an encounter, you can get some pretty wacky bonuses that can make you rather powerful.
2. Ah! This was a poor edit on my part, on page 3 it lists a "Trader" as an encounter, the "Merchant" was meant to be worded the same but this was an oversight. To clarify, treat the Merchant in room 5 as you would a Trader.
3. That would be correct, if the Target Result is lower then Treasures that work as "minus number" would be more useful than "plus number". It was my intention that Treasures could be mixed and matched to offer various +/- to help get to the TR.
I hope that clarifies some things, and thank you for the notes. This is a game I would like to return to, and clearly it needs an update! Thank you again for playing,!