My suggestions: add 4 Drowner of Secrets. Leech Bonder, Sea Scryer, Puresight Merrow can also be taken out and replaced. I think you're going for a sort of draw/form of scry with those cards, and there are better spells for that (not Merfolk, albeit), but my suggestion would be control with counterspells, not just Lullmage. Here's my deck list that is completely focused on milling in a Merfolk deck: http://www.mtgvault.com/ViewDeck.aspx?DeckID=223760 (although I love the idea of the Wanderwine Prophets and Merfolk Sovereign combo).
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I would recommend taking out the Cultivates if you're going to use such low costing spells, in addition Bear Umbra (4 mana), Canopy Cover (2 mana), and Savage Silhouette (3 mana) are all pretty good, fairly cheap Auras. If you want more removal, for such low casting creatures, I think Smite would work really well. If you want to go for higher costing spells like Gigantiform I recommend putting in more ramp, like the Cultivates, Overgrown Battlements, etc., and putting in Auras like Gigantiform and Mammoth Umbra, along with bigger creatures, like Wurms or Angels. Don't know if that'll help or if you even wanted help, but I also like the idea of Green/White Umbra/Aura deck. Good luck.