1) If it is a Ford-O-Matic or Merc-O-Matic, the fluid level should be checked with engine running with gear select lever in NEUTRAL. Fluid should be type "A" (if you can find it). The recommended replacement fluid is Mercon/Dexron or Dexron II.
2) I recommend disconnecting the gear shift link from the transmission lever under the car (engine NOT running). Place the gear shift lever in Park, then go back under the car and push the Ford-O-Matic lever all the way up and hold it there while trying to insert the gear shift linkage rod into the hole at the end of the lever. If the linkage won't go in, your transmission shift linkage is out of adjustment. Adjust to fit and repeat the entire procedure with gear shift lever in NEUTRAL and trans lever in the middle detent. The rod should go into the lever freely.
I don't know about the Mercury, but the same year Ford did not have any wiring associated with the coil circuit in the steering column. All you should have is turn-signal wiring. You have the starter-neutral switch at the bottom of the steering column, but it is only an enabler switch that completes the circuit allowing the starter to crank. A second circuit of that switch enables the back-up lights to operate when the gear shift lever is in reverse.
