I've just read the Bayard article (and commend that to everyone interested in these ballads) and then the rest of this thread.

Here are my answers to most of Richie's questions:
2. Not a mermaid as usually understood, but a supernatural being of some sort. Bayard's argument for her being a banshee is plausible.
3. Yes, at least in the above Gloucestershire version.
4. Exactly what she is washing, and what that might signify, seems variable. But washing a sark as a token of betrothal would make sense in connection with her telling him to choose. "I'm washing this to show that we're going to be married – or else."
5. She knows that he will die IF he refuses her.
6. The change from "washing [something] on a white marble stone" to "washing a white marble stone" is the sort of change that can easily happen, albeit that the result makes little if any sense.
7. His death must have some cause, and it is surely something to do with the (mer)maid. None of the Collins versions make clear that he has been or is now being unfaithful, but the Colville (Child 42) versions imply that he has married another woman.
8. See 2.

The Gloucestershire version, though very similar to the Hampshire version, has some interesting features, including the explicit choice between the maid and dying, her washing the shift (i.e. her own garment) rather than a sark for him or the stone, and just the one white marble stone; the one that he is to be buried under, though as in other versions it is to be placed "close to fair Alice's hall", so presumably in unconsecrated ground.