You can try tipping your brake levers downward untill they match the angle your forearm has when you ride. If the levers are too flat, you will always be rolling your hands up into an uncomfortable position.
The saddle position is the first thing you set, there are several methods available online if you search. A quick method I use to start for height is to have my leg almost at full extension when my heel is on the pedal at the bottom-most position. For forwards/backwards position, I basically use KOPS (front of knee directly above the pedal spindle when in the forward horizontal position) as a starting point. If you feel too compact once the saddle position is set, move on to changing stems/handlebars. BTW it's probably not an option at this point, but from what you say about your height, you might find a slightly larger size frame to be more comfortable.
I'm going with the Junkyard style of "cut to the chase" advise. Ride that bike 100km a day for three weeks. Your wrist pain will disappear. It's an XC bike, It's meant to be a bit stretched. If you want an upright position for paved roads, maybe a comfort bike or hybrid would be in order.
The next largest size for Merida frames is an 18inch and when I tried it before I bought this bike, it really felt too 'long' and stretched out. There was no question that I was putting heaps of strain on my arms while riding the 18inch version of my bike. This, plus the handling ability of an 18inch frame could absolutely not compare with the 16inch frame. (which is what I'm riding now)
Incidentally, I also thought about buying a GIANT frame -which are available in abundance here- as they have a 16.5 and 17 inch frame available. However, when I compared the geometry of 16 inch Merida and 17inch GIANT frames, despite the extra frame size, the difference in top-tube length was negligible.
Also, before buying this bike, I was told buy no less than 15 friends who mountain-bike regularly that its better to buy a bike that is slightly small than slightly big.
The logic being that you can always correct your riding position on a smaller bike but an overly large frame is almost impossible to correct for mountain biking.