The more merchants = more btc flowing = stronger economy.
Price will increase if demand increases more than supply. To make that happen, people has to be interested to buy bitcoin for whatever reason. It may be for privacy, it may be to save in a non inflationary currency, it may be because there are merchants willing to sell their products for a discount with bitcoins... So yes, it's essential that more merchant accept them, but that's just one of the reasons to want to have bitcoins.
The main reason why investors and speculators are buying bitcoin is because they are hoping that a lot of consumers will eventually buy it for the purpose of spending it on goods and services. This is ultimately what will be the demand for bitcoin in the long run (if it is to be successful). Bitcoin is not an income generating asset so investors will buy it for no reason other then hoping for price appreciation, however if the only reason anyone buys an asset is because they hope the price will increase then it is nothing more then a bubble.