I just found out about the utility TES4Gecko which seems to allow merging huge numbers of plugins. I would like to use it, as my game crashes continuously with all the mods I have, but when I tried to merge the several official plugins in a single file, I received all the quests I had already completed, for a second time. Could someone please help?

That's because when you merge plug-ins, you're going to change the formid's. So your savegame looks and no longer sees the old formID's, sees new formID's, and does exactly what it's supposed to: losing any quest progress, items gained, etc along the way.

Basically you should take your time if you want to start merging, go slow, one or two small mods at a time and figure out what you're doing. There's some good suggestions in http://www.gamesas.com/topic/1376687-need-advice-on-what-to-merge-and-not-to/, and others like it in the mods section.

But listen good: if you're getting crashes, merging WILL LIKELY NOT FIX ANYTHING. All you're doing is keeping whatever's causing crashes and trying to pile more crap in to your setup. There's a hard limit of 255 plug-ins, including oblivion.esm and your savegame file. The game can't even activate more than that. The ONLY time that merging will help is if you've got a combined total of about 400 esp's, esm's and bsa files (active or not) in your data folder. Once you're around that limit, you'll experience crashes and directory thrashing. If that's the case, merging will help you reduce that count, but that's it. There are other ways to deal with that issue, including using WryeBash's CBash option, unpacking bsa's, and moving unused mod files out of your data directory. It's far more likely that your crashes are due to other causes and you need to figure out the underlying issue to get a stable setup with fewer mods, then start merging and adding things back in. Just my 2 cents.

In fact, I am getting crashes mostly around the Imperial City waterfront area. There are some temporary freezes until I activate less than about 130 plugins. When it's more than that, the game will either freeze completely or crash when I come near the place.