In SpaceClaim, go to the Workbench tab and click on the Share button. This will create a single connected mesh in Mechanical. You don't need to merge the faces.
If you want to merge some faces for some reason, you do that in SpaceClaim on the solid volume. I think Merge Face is on the Repair tab. When the solid has fewer faces, copy/paste the faces to Surfaces and delete the Solid.
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