No, Saul did not show mercy. The following verse gives us a glimpse of the what Saul was after
But Saul and the people spared Agag and the best of the sheep, the oxen, the fatlings, the lambs, and all that was good, and were unwilling to utterly destroy them. But everything despised and worthless, that they utterly destroyed.
God judges after what is in the heart. You can see above what was in Soul's heart.
I read at some point a very beautiful verse about resurection. I do not remember where in the Bible it was, but I will look for it. It said something like "I will restore all to whom I was unjust".
In this world where there is a woar between God and Satan and his angels, there are colateral damages. But I am sure God will be just to each person individualy. He has the ability of resurecting and giving another chance. For him death is not permament but a temporary break. We as human, see only what we have now, this life, and see death as an end. For Him it is not!