Can I merge the heroes I’m not using or delete them or sell them or something? Do they just continue to take up space even if I upgraded to a better one and don’t plan to use them anymore?
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You can’t merge or sell.
Use than to hold equipments that you want to keep and make some space in your storage.
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If you play long-term, you’ll definitely want the extra heroes to complete the level up a hero 3 times daily quest. It gives 20 fit stones each day. Once your primary heroes are at max level, you’ll be glad you have extra heroes to complete the quest.
As a side note, I would recommend leveling up your heroes to level 30 at some point to hold extra equipment (as the previous person mentioned), but don’t level more than that without a good reason. And leveling just because you can is definitely not a good reason in this case.
In my case, I’m currently upgrading up an extra mage three levels per day. I eventually want it to be as strong as my other 2 mages, but I’m in no particular hurry yet. So, that mage is doing the bare minimum to complete the leveling up 3 times quest.
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There’s a misleading wording with the upgrades - says increases hero capacity. That probably refers to ‘capacity’ to evolve. As far as I can tell, there is no max. number of heroes you can have 
, so don’t worry about it, they’ll just be at the bottom of your list and later you might want the extra people (to try different team compositions or send more waves of heroes into dark rush).
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