Bags, stickers, pins and similar things that can be attached to daily use objects are always a great idea for merch but a "Dream Merch Item", no limits, blue sky thinking? Either Vinyl records of some of the classic hits, perhaps a colour coded four disk series even or wall scrolls.

Nepeta's hat would probably sell out before the announcement of it had it's digital ink dry

I'll second the makeup and cosmetics idea but anything of that nature would probably take alot of collaboration

Official phone cases also seem a popular suggestion in the aggregate.