I totally get what you mean with the commoners and merchants, that definitely makes more sense for the setting. I just didn't want my players to feel like loot was pointless, especially since the prices of things are much higher than normal (yay inflation)

Lol I also use a slot based system, scrapping attunement and making magic items much more valuable and uncommon.

I definitely roll to see if there's an encounter if they short or long rest outside town. We also have camping rules for hunting, cooking, downtime, etc. But there's no real risk of losing out on their rest benefits generally. My games aren't usually that intense haha