1. As for a middle name, there are a wide range of names you could use, not including any names starting with an "M". Like,
Mercy Marie wouldn't sound as good as
Mercy Elizabeth. That's just my opinion. Also, I think
Mercy would be better as a middle name than a first, but again, that is just my view on the name.
2. Religious views aside, I could definitely see it as being a nickname for
Mercedes (which means "
Mercy"). I think it's pretty, but with all things considered, it is a very risky name.