I'll have a go at your second question. Can cubase merge midi to wave format without recording them to an audio track? The answer is no. In the case of external midi equipment you will have to playback the midi and record to a track.
With internal midi equipment some soundcards can record this without playing the audio through the audio output, so you don't hear anything - but inside the PC it's still playing back and recording to a track.
[This message has been edited by HanzZ (edited 10-20-2001).]