1. Armed merchant ships tended to be the ships owned by great mercantile entities who have the ability to purchase expensive cannon. Ships from the East India companies for example. To give a nonwestern example: Chinese merchant junks owned by powerful merchant clans of 16th and 18th century southern China were armed as well. So it wasnt the case of any old merchant sailing ship being armed

2. They "stopped" being armed by roughly the mid 19th century. Factor being that colonial powers' navies have sprawled across the globe ending high level piracy like the likes of north african pirates and Southeast Asian piracy. Most threats at sea to civilian shipping were then able to be seen off by a couple of chaps with rifles.

3)I put "stopped" in quotation marks because there were still incidences of mercantile shipping being armed. In WWI and WWII for example merchant ships were outfitted with deck guns to see off light threats. Usually surfacing submarines or torpedo craft. But they were no match for a real warship

I wish i could furnish you extensive links to books as private violence is an interest of mine and I have been in lectures on the topic. But a nice beginning book on this would be "Mercenaries, Pirates, Bandits, and Empires: Private Violence in Historical Context"