Yes, one person would get the merged files. And after sending in their esps, no one should work on anything else until they've received the new master. (So it's good to arrange a time for the merge when other people couldn't be working on the mod - time zone differences can be handy.)
And yes, the merged esm absorbs the esps. When a merge is complete all the esps can be deleted. (Though I like to keep a backup folder of esps,scripts, and their matching esm version, so that I could revert.) Everyone should start with a new esp with each new version of the esm.
Hmm.. So they load up the esm data, and set a new active plugin once they have the updated esm.
And if there are changes to be made in the content of the old esps, after the esps have been merged, you simply start up the esm without loading any of the plugins, since they would be there, and create a new esp that would later be merged again?
If you pass the esm off to someone, do they need the supporting files or are those merged in as well? (scripts, dialogue views, custom models)
Sorry for asking lots of questions, but since its going to be a pretty important part of the process and you all are willing to help I figure its better to understand it as much as possible.
I really appreciate the help!