I thought that if less hull was in the water it should be easier to steer plus better fuel economy.
Aahh...that's where the vicious circle begins. You need RPM's for lift and speed. Fuel economy is acheived operating in the 70-80% (approx.)of the power band of your outboard. Max RPM's=Max Fuel consumption. (With minor exceptions, i.e: towing, engine problems, etc...)
I always thought that you wanted to trim up as much as you could to have less hull in the water for fuel economy and speed.
Your trim button will not overcome the laws of physics. 50HP pushing your boat will not provide optimum trim conditions for the loaded weight of your hull, which relies entirely on torque (holeshot), and thrust. (50HP is all a 50 Merc can do at the prop since '96, unless you crack some bolts and go inside.) You should try and gather a few props to see which one helps.
There are an enormous amount of variables that can exhibit the results you describe; engine mount height, prop size and condition, WEIGHT DISTRIBUTION (very important), hull damage, are a few that come to mind, just to hit the high points.
During the conditions you describe, what is the loaded weight (approx.) with fuel, livewells, gas amount? Is the prop clean or nicked up? Are you starting from an idle, trimmed down then rapidly throttling forward, tapping the trim up as the bow breaks over?
WHEN I AM RUNNING AT SAY 4000 RPMS WITH THE MOTOR TRIMMED DOWN ALL THE WAY, IF I START TRIMMING IT UP, THE RPMS WILL INCREASE TO ABOUT 4200/4300 WHEN IT IS TRIMMED ALL THE WAY. THIS IS WITHOUT GIVING IT MORE THROTTLE.
That's what is supposed to happen. Your angle of lift increases, decreasing some drag and adding some speed, after planing especially. If I had to guess, what you are sensing as wheel resistance under applied trim speed is actually the boat trying to break over the bubble and plane out. Your steering should stiffen slightly before the break over.
I really believe that some minor adjustments, and above all seat time, will improve your operating conditions. Good luck!