I get nervous going at 60km lol. The first time I drove on a main road was an accident, my mum thought it was still a block away - She was terrified haha, luckily it was a Sunday morning so it was quiet. Merging is scary, i'm always worried that i'm going to pull over too far or not far enough.
When's your next lesson?
You should go a bit out of Melbourne and practice driving on some more rural roads - the lanes are wider and there's less traffic, and even when there is traffic, cars don't honk at you for taking more than 0.2 seconds to go at a green light. Definitely great conditions for getting your confidence up!
When I was learning to drive, I found that practicing parking actually helped me with merging, because it helped me get more familiar with the size of the car and how much I needed to turn the wheel and all that.
Edit: oh, and just turning this into K888's driving tips
The best thing I ever learnt from my driving instructor was to have your driver's side wing mirror so the horizon is 2/3 of the way up, and to have your passenger's side wing mirror so the horizon is 3/4 of the way up. Helps so much with a) merging and b) awareness of other cars around you!