IMO, any bird clipped prior to the age of 6 months, and this could be 12+ months for the larger guys, has not been properly fledged. Birds can "forget" how to fly and lose the muscle mass required to fly. Flying may be instinctual, but knowing *HOW* to fly is learned. That is, turning, banking, landing, etc. Even if they get 1-3 weeks of flight before being clipped as chicks, this is *NOT* enough time for them to truly learn and become confident. They may be great, but then having to spend several months clipped and falling to the ground, possibly with bumps and bruises attached... it's easy to see why they'd become scared to fly.
If you want Merlin to learn how to fly and with confidence, then please do not stop! However, you do need to change *how* you are working with him. If he's not comfortable hopping a short distance just out of reach, then start with a step up and build his confidence up. If he's too afraid, then go back to a step that he *can* achieve and repeat until he's ready for the next step.