I suggest that players to be allowed to merge plots if they happen to be next to each other and claimed by the same user. 

but then there could be a giant plot the size of 10 plots...

What's wrong with that?

If plots were allowed to be merged there would be big problems.

The biggest being; if the player with the plots merged isn't active and has their plots removed, there would still be blocks on the road.

Well, Pat could come up with something that fixes that.

The authors of PlotMe were working on creating merged plots earlier this year, but looking at their GitHub it appears that they have dropped it. I'll see if I can work something out, but I can't make any promises.