I have a Nexus 7 and a Nexus 4. I've created a new email address which i understand changes pretty much everything in terms of my android profile. Is there a way to merge the old with the new so i don't have to re-download all my apps?
Sorry, but the short answer is an appalling 'NO'. You can use both accounts, though...
You can attempt to transfer your license from one account into another but this has to be done through each app's dev, not through Google. You can imagine that's always a PITA and not really successful.
No problem I had the same issue with my brother and that's how we found out. This and not being able to purchase apps for someone else (you can only purchase apps for your own account, you can't 'gift' to anyone else) do seem to be huge issues with how Google Play works.