As a current parent of a Merchiston boy,- I copy below the reply I put in a PM to the poster for future reference if anyone else is considering the school.
I'm glad you took the time to look around and get a feel for the school, it is really the best way. The school truly is mixed ability- and they make a point of treating each boy as an individual to be the best they can be.
The entrance exam is more about making sure the boys are put in the right set rather than a test to see if they are good enough for the school academically. They do state that they are not a particularly selective school.
My son is in that S2 year group now and there are 60 boys spread across 4 maths sets. The top set yes are very high achievers and probably GCSE level already, but the bottom set will be just aiming for C in GCSE in 2 years time. There are also "drop in" sessions for support for learning for anyone who needs it and there is no stigma attached.
The less academic boys don't do Latin and some don't do a foreign language either if they struggle, but get extra help in those lesson times instead.
The school values sports, music, leadership, engineering ability, drama etc very highly and gives opportunities to boys to excel in whatever it is they are good at; or just be a good all rounder with good manners, a decent education and confidence to go forward in life.
If you have concerns, I would talk to the school. They are very open and will be honest with you. At the end of the day they are a business too and will work with you to get your son fitted in to the right place in the school. They have a support for learning department who work closely with the less academic boys . They may even suggest going back a year which is not unusual in the school especially if students are coming in with a summer or autumn birthday. In my son's year there is a spread of 18 months+ of ages in the year group.
We have been very happy with the school, this is my son's 3rd year there as a day boy. We had some settling in issues in the first year as it was a huge culture change from his previous school and much longer days, but they were very supportive and helpful in getting over it. The parents are also lovely- not at all snobby as I was afraid of!- and the school is very inclusive of parents with lots of opportunities to go to matches/church services/concerts/ dinners etc.