Formatting FreeDOS partition
Solution 1:
You might want to look at gparted to manage your partitions.
As a suggestion, the formatting for any partitions you wish to merge should be the same file system as Windows (NTFS) beforehand if you wish to merge them with a minimum of fuss.
That said, it looks as though the FreeDOS partition holds your boot files (via the "System" designation), so I would be careful tampering with it. It is likely the problems you're having formatting/adjusting your partitions are related to the placement of these files.
Boot Files
If you want to move the boot files (assuming you don't want the FreeDOS partition anymore), you may want to look at EasyBCD.
You can currently download the "free" version ("Register") without actually giving any information (just leave the requested fields blank). The option to move boot files is one of the extra tools included with EasyBCD.
Note: I am assuming EasyBCD should be able to do the job given the FreeDOS partition. However, it may not. Either way, there is always the option (potentially) to shrink the FreeDOS partition to an inconsequential size and leave the boot files where they are (or you can, of course, look for another tool).
As an caveat, you will probably want to decide on a boot files strategy before adjusting the other partitions.
Regardless, I would also be highly tempted to back up any data you don't care to lose as well before making any serious adjustments.