The following information comes from a Nintendo Power interview with Capcom's Masachika Kawata...
Speaking of development, and more info at E3:
"It''s going really well. Because the game is huge it's a lot of hard work, but when the weather gets a little warmer, we should be able to show more of it."
Speaking of direct sequel:
"Unlike Mercenaries, which is all about shooting action, Revelations is all about survival horror, the very genre Resident Evil established. We actually think of Revelations as a direct sequel to Resident Evil 5 and it will be full of new, innovative ideas and characters."
Speaking about Mercenaries hopefully becoming a franchise itself, and DLC:
"Should the Mercenaries establish itself as a franchise as we hope, we'll be looking into expanding the game through DLC, though of course we'd have to consult Nintendo regarding the specifics."