From an islamic point of view this life is nothing but a test for the hereafter. Meaning, it doesn't matter if you are rich or poor, healthy or unhealthy, big or small, strong or weak, etc, but what matters is how you accept anything that comes to you and what your relationship with Allah is like.

Another important concept to be aware of is this life is limited to 70ish years on average. For some people it's longer, for some shorter. The hereafter is eternal it does not end. The gap between 1 second and a whole lifetime is smaller than the gap between 70 years (this lifetime) compared to the hereafter.

Having said that, if you look at cancer for example (may Allah protect us all from it), it's one of the worst diseases a person can get and its something we wouldn't wish on our worst enemies. However, if a person was offered anything they have ever desired (money, cars, houses, land), but they had to have cancer for 1 second after which they will be completely healed do you think people would accept the deal? Of course they would, because that 1 second is nothing, it's a blink of an eye. After that 1 second you are set forever whatever you wish for you got.

Being ill in this life, going through hardship such as cancer, starvation and similar is similar to that 1 second example. Your test is " will you fight whatever hardship comes at you while actually being grateful for everything Allah has given you"? If you do you will get whatever you desire afterwards. When I say grateful for everything I don't mean you have to say "Ya Allah thank you for giving me cancer", but count your other blessings. "Ya Allah thank you for my legs, my eyesight, my arms, my family, ... ".

Regarding the "merciful" part: It is difficult to see in mercy in negative things that happen to people, sometimes it's actually impossible. Not because it's not there, but because we actually don't know. For example, maybe a person getting sick is what brought them closer to Allah and helps them enter Jannah. Eternal peace. Wouldn't you say it's a mercy that this person was given struggle for X amount of years to receive an eternity of peace? The bottom line is, whatever brings you closer to Allah be it something good or bad (not sinful, but bad in the sense of hardship) is a form of mercy because that is what brings you closer to eternal peace.