Not sure if the Merc electric fuel pump is like the one I had on my Volvo 4.3. On my 95 Volvo the fuel water separator screwed right on to the bottom of the fuel pump. What I found out was that if I changed the fuel water separator and did not fill the new fuel water separator with fuel the the pump would not prime and would not suck fuel from the tank.
Once I filled the fuel/water separator with fuel, no problem, she fired right up.
As Bondo said, the fuel water separator should be full, , as in to the top.