Implement Configuration Merging and Precedence Rules

[ShohamBit]

Background
With both config files and command-line flags in place, we need a clear set of rules to determine how these configurations interact. Specifically, we need to ensure that command-line flags always override the config file settings, and that default values apply only when neither file nor flags specify a setting.

Tasks

• Implement logic to read and store configuration from the YAML file first.
• Parse and store all command-line flags.
• Merge configurations by applying the precedence rules:
  1. Command-line flags override any value set by the config file.
  2. Config file values override default values.
  3. Defaults apply only when neither flags nor config provide a value.
• Validate the merged configuration for consistency and correctness.
• If conflicts or invalid states arise, produce clear error messages.

Acceptance Criteria

• After merging, the final configuration state correctly reflects CLI > File > Defaults.
• Clear error messages are shown for invalid merges or conflicting values.
• Unit tests confirm correct merging behavior and precedence.

Why This Matters
A well-defined and correctly implemented merging and precedence strategy ensures a predictable and transparent configuration system. Users will know exactly how their settings are determined, making the system more reliable and easier to understand.

[yanivagman]

Part of #4453