[DahkCeles]

I have never used merc mode, but I'm going to guess that UNIT_FACTION would fire with arg1="player". You might also be able to try SPELLS_CHANGED?

For your fall-back question.... here is a solution that lets you use as many spells as you want.

-- list any spell here; doesn't even have to be your class -- doesn't even have to be real!
local spellsInPriorityOrder =
{
    "Ultimate Rogue-Slaying Greater Pyroblast!",
    "Combustion",
    "Arcane Intellect",
    "Thoughtsteal",
    "Shadowfiend",
    "Power Word: Fortitude",
    "Auto Attack",  -- fallback for other classes
}
 
-- %s will be replaced by the name of the spell
local macroPattern = [=[#showtooltip
/cast %s]=]
 
local function updateMacro()
    for __, spellName in ipairs(spellsInPriorityOrder) do
        if (GetSpellInfo(spellName)) then
            EditMacro("myFavouriteMacro", nil, nil, macroPattern:format(spellName))
            break
        end
    end    
end
 
local f = CreateFrame("Frame")
f:RegisterEvent("PLAYER_PVP_TALENT_UPDATE")
f:RegisterEvent("PLAYER_LOGIN")
f:RegisterEvent("UNIT_FACTION")
f:SetScript("OnEvent", function(event, arg1)
    if (event ~= UNIT_FACTION or arg1 == "player") then
        updateMacro()
    end
end)