Things I Want To Understand In Roman Catholic Theology

Many things still utterly confuse me about the teachings of my new church, here are some I want to clear up:

1. Merit - It's a word that invokes disgust in my soul after reading so many Protestant writings against it, and I'd like to understand merit properly in Roman Catholicism (as I'm going to need it to go to Heaven now). The other day, I read this, and it made alot of sense: http://www.newadvent.org/cathen/10202b.htm
But I'd like even more of an explanation. C.S. Lewis' quote makes a bit of sense:

"People often think of Christian morality as a kind of bargain in which God says, 'If you keep a lot of rules, I'll reward you, and if you don't I'll do the other thing.' I do not think that is the best way of looking at it. I would much rather say that every time you make a choice you are turning the central part of you, the part of you that chooses, into something a little different from what it was before. And taking your life as a whole, with all your innumerable choices, all your life long you are slowly turning this central thing into a Heaven creature or into a hellish creature: either into a creature that is in harmony with God, and with other creatures, and with itself, or else into one that is in a state of war and hatred with God, and with its fellow creatures, and with itself. To be the one kind of creature is Heaven: that is, it is joy, and peace, and knowledge, and power. To be the other means madness, horror, idiocy, rage, impotence, and eternal loneliness. Each of us at each moment is progressing to the one state or the other."

2. How on earth Free-Will makes any sense - I took philosophy in University and everyone was in agreement, Free Will doesn't really seem possible logically. The Church tends to just say "God gave us free will, ergo, free will works". But like St. Anselm I seek understanding through faith and wish to understand this mystery.

3. The Biblical support for and role of Christian Priests/Priesthood and their/it's mediatorial role

4. Why we would pray to the saints, and whether or not it truly is simply a reflection of courtly life onto God.

As Lewis said: "There is clearly a theological defense for [devotions to saints]; if you can ask for the prayers for the living, why should you not ask for the prayers for the dead? There is clearly also a great danger. In some popular practice we see it leading off into an infinitely silly picture of Heaven as an earthly court where applicants will be wise to pull the right wires, discover the best 'channels,' and attach themselves to the most influential pressure groups... The consoling thing is that while Christendom is divided about the rationality, and even the lawfulness, of praying to the saints, we are all agreed about praying with them."

5. The relationship between the Old and New Testaments - This is really important as many of our Catholic proof-texts come from the Old Testament, but as a Baptist the Old Testament was pretty much unapplicable in every way to Christian life. If someone came up with an argument or thought about the Old Testament we'd simply say 'Well that was then, this is now'. Covenant Theology was also helpful, but I'm wondering what Rome's stance on this issue is.

If you have any ideas, or book recommendations about these let me know.