Make merry in saloon on river? (7)
I believe the answer is:
carouse
'make merry' is the definition.
(carousing is a kind of making merry)
'saloon on river?' is the wordplay.
'saloon' becomes 'car' (type of car).
'on' says to put letters next to each other.
'river?' becomes 'ouse' (Yorkshire river).
'car'+'ouse'='CAROUSE'
'in' is the link.
(Other definitions for carouse that I've seen before include "Drink freely and noisily" , "Take a course to party wildly" , "Party noisily" , "Drink and make merry" , "Engage in boisterous, drunken merry-making" .)