Mermaid cove is a great idea. But make them a warring faction of mermaids. Then after defeating them on the map you gain mermaid allies that can now aid you in the defending of your island. I love the idea of quests unlocking special hero's or pirates. Get your Academy to x level and complete this quest to unlock x troop.
I would suggest that they be like Frankenbrutenstein where they cost gold and not grog to make them seem like mercenaries.
Battle mermaids would be cool. They could beat the ship with their tails or something, haha! Really, in my perfect Plunder world, mermaids would hang out around my island, maybe dive for treasure/gems, swim around being awesome, and do some other useful stuff (enter Chris' genius here), and maybe you can take some into battle with you. There could maybe be a mermaid lagoon to discover on the map and that's how you find them and bring them back to your island as allies, like @Bear said. I don't want them to be like the wenches and burly guys that walk around, but you can't interact with. That would be horrible torture. Yes. This. ^^
