The thing is, Mercator was never actually intended to be used as a map, per se. What it was supposed to be used for was a navigation chart, and it's extremely useful in that context: straight lines on the map correspond to straight lines in the real world, the compass directions are the same no matter where you look, and so on. Other projections distort these things, and there can be good reasons to do that depending on what exactly one wants to do. If you're trying to find single points, it really doesn't matter so much. But when the reason you're using the map is to find a route between Point A and Point B, Mercator really is the most reasonable projection for the job.
Yes, you are correct, however that's a different sort of straight line: it is the shortest distance between two points, but it isn't the most easily navigable line. The navigable ones are lines of constant bearing, since a ship could/can set their compass and make adjustments to hold it "straight" rather than having to do the computations required to follow a great circle.
