Re: Neighbourhood Stories Not Following Settings
If you look in Manage Households, the My Households and Other Households have two separate sets of Neighborhood Stories settings. They look like they would be the same, but they're not. Your game generated townies are underOther Households. Open up that tab then open Neighborhood Stories settings and you'll see their settings and be able to adjust from there.
Households merging/marrying is from a mod, not from Neighborhood Stories.
Perhaps that mod is also interfering?