How can I merge multiple rows in a single page?

Available only in the Google Docs Add-on

By default each spreadsheet row is merged into a new page. However you might want to remove this Page Break when producing envelops, cards, etc. This will allow you to copy the contents of your document template with in the same page of the merged document. To do this click on the Options button and from the dialog set No for the 'Add Page Break' option.

For example you can design this card in your document template:

To produce this in your merged document:

Note on labels:

If you want a full-fledged add-on specifically designed for labels, the Avery Label Merge add-on is more appropriate. This add-on will allow you to have labels in a multiple column layout, which is something that the 'Mail Merge' add-on does not do.