Correct. If you want to be able to delete something in-game, do not merge packages. The game is not going to edit a package file when you delete something, it just deletes the package file the object you want to delete is in.

Actually you can use the multi installer by Delphy without issues.
I have now extracted all Sims3packs I can no longer install (I do not own), and they appear in-game.
The only issue with doing it this way is that they lose the store icon.

It's a client side copy of your store account. If you never sign in to the store, it doesn't know about you.
Spyware or not? It's TS3's new DRM, make of it what you will.

Thanks. I found some XML mods now behave really badly since I updated, maybe
because the underlying XML has changed. Wish there was an easier way to check
all these mods against WA.

Is this compatible with WA?

I apologize for contradicting you here, but you can certainly use file symbolic
links as well: mklink /h. This is the default if you give no further arguments.
And you can choose between junctions (/j) and /d directory symbolic links.
The latter kind is used by Windows internally to link various system folders to their
real locations (for example to relink Documents and Settings to Users).

It is possible if you make a symbolic link.

First move the entire The Sims 3 folder to where you want.
For example in D:\Sims3. Do not leave a The Sims 3 folder
behind, if it is there the next step will fail.

Next open a command console with admin rights (UAC):
1. Click the Start button
2. Type CMD in the Start Search box
3. Press and hold down [Ctrl]+[Shift]+[Enter]

Type mklink /J "C:\Users\you\Documents\Electronic Arts\The
Sims 3" D:\Sims3

This will make a junction (symbolic hard link) to D:\Sims3
from the original location. It will recreate the folder you
moved in the first step, but now as a symbolic link.
Think of this as a folder level shortcut.

Windows and all programs will think the files are still in
documents, but in reality they will be in D:\Sims3 now.

If you already moved My Documents, use the new path
instead of the C:\Users location.

If you right click the My Documents folder you can move it.
Click the folder and not the library.
C:\Users\your user name\My Documents
Pick Properties - Location

But you cannot prevent The Sims 3 from using the Documents
folder even if you move it.