The error messages say that the tp2 cannot be found, could it be that you removed mod folders from the game folder? The installer needs the mod folders with the tp2 (inside) and teh backup info to deinstall a mod.
DLC Merger is needed (as the first mod) in a BG:SoD game from GOG or Steam. For EET, DLC Merger has to be installed onto BG:SoD before you use it for the EET transformation. If you bought the game from BeamDog directly, DLC Merger (modmerge) is not needed, yes.
I cannot guarantee EndlessBG1 still being fully compatible with an older game version, sorry.