Automatics have several intenal wet clutches that engage in combinations to engage the various gears. Your "flare" issue could either be a worn clutch or a control system issue, which might be solved by an adjustment.
Looks like no one on this board is an auto trans expert. Neither am I, but I can give you a basic diagnosis.
You should probably seek out Merc transmission expert and see if he can diagnose and correct the problem with an adjustment. Otherwise, you might be looking at a trans overhaul not to far down the road.