I just (re)installed IP the other day after playing with just the base game on my new computer. Of course IP is buggy and I knew it wouldn't be perfect. But I'm having issues with mermaids. They aren'...
I'm a bit fuzzy on this myself, but I believe that the homeless NPC mermaids are part of the service pool and its size can be altered using NRaas Register. Four does sound about right for a default size. The game I have loaded up right now has no service mermaids, but that's not surprising since it's Dragon Valley, so the option isn't showing.
Resident sims can also have the occult state though, much like any other.