Agreed. His legs look unimpressive compared to others. Looking at his legs and face one would think he's an amateur, who still has to lose a couple of kgs.
His upper body can get quite skinny, though. He seems to have an ideal body for cycling, although atypical, in that he has a low overall weight but he carries it down low (better COG?), meaning he can make power but doesn't have a largish upper body to drag around.
Regarding Merckx, yes, he could surpass the Cannibal although I doubt he'll win as many non-TdF grand tours. But really, there's almost no race in which you could say he wouldn't be among the favorites if he targets it. Because the level in cycling overall is much higher now, his current achievements look even more impressive.