Finally, I get to a completely lost topic before KL or KS, this is my lucky day! The bottom (from the world view) of Traverse Town is Merlin's house. This I know for a fact.
Traverse and Twilight Town are completely different worlds, one existing in perpetual night, the other in perpetual twilight. The Real time that was metioned regards the Clock Tower in Twilight town, it will tell the real time, but the town stays in Twilight.
In regards to KH2, Twilight Town is rumoured to be the 'Traverse Town' of KH2, but this is uncomfirmed, but likely. In other words it will be the town you go to when you need to stock up or buy weapons. However Traverse Town is rumored to make a reappearance, and it will most likely still have shops and such, but it is doubtful that Leon and the others will be there again. Other than that, not much else is known currently.