I think James wouldn't have arrived in the city till after Kiernan left the Rangers. Though he is probably fascinated by dragons and Dragon Riders. But they do probably know of each other. And James may well tolerate the cheeriness simply because Kiernan is obviously skilled at what he does.
I would be fine with establishing a line with Merri for the future. It will all depend on how well he can handle James's rather frigid reaction to him - James wouldn't want to like Merri, pretty much on principle (for being naive and a derp, and whatnot). But that doesn't mean it couldn't happen.
I have no idea how they would interact, but if Sky did ever steal from him and get caught, it would be rather harrowing. Honestly, though, out of respect for Pyr, he probably would tolerate Sky better than some others who would rub him the wrong way.