Otto is merry: Agathe finally seen in film (7)
I believe the answer is:
tootsie
'film' is the definition.
(1982 film)
'otto is merry agathe finally' is the wordplay.
'merry' indicates an anagram (merry can mean drunk).
'finally' indicates one should take the final letters.
The final letter of 'agathe' is 'e'.
'otto'+'is'='ottois'
'ottois' with letters rearranged gives 'tootsi'.
'tootsi'+'e'='TOOTSIE'
'seen in' is the link.
(Other definitions for tootsie that I've seen before include "Funnily enough, foot" , "A child's foot?" , "Film with Dustin Hoffman" , "Foot or toe - I set, too (anag)" , "Foot (jocular)" .)