So what, specifically, made the Merlin engine so superior to the Allison? Horsepower is made by superior breathing/compression so, obviously, the Merlin had bigger intake/exhaust ports/valves, but did it have more exotic (for the time) refinements i.e. multi valves, DOHC (chain driven or belt), mechanical fuel injection vs water injected carbs or exotic materials like newer aluminum alloys vs magnesium? But having achieved superior performance in piston driven aircraft the push for additional performance gains died with the advent of jet power by the Germans.
The BIG giant difference was undoubtedly the supercharger, which was a 2-speed, 2 stage intercooled supercharger. The Allison engine was supercharged with a less capable single-stage SC that did not do altitude well, specifically, the altitude bombers flew at...so the engine swap also worked well into that role for the P-51. Horsepower went from about 1200 to a bit over 1600 changing to the Merlin. That ain’t chopped liver.
A few other improvements aka tweaks came in the form of routing exhaust gases so they provided a bit of thrust and a slight wing adjustment in later versions. The Merlin used 100 octane fuel to advantage as well. But the overwhelming big deal was the engine swap.
Reading the linked history, it’s quite amazing how resistance from the brass kept what was a champion plane from its ultimate place of glory. And in multiple instances. I mean, how smart do you have to be to think that bombers maybe ought to have escorts? And that the fighters doing the escorting maybe ought to have drop tanks so they can range with the bombers. And if they are fighting, then worrying about the loss of bombload is kind of the wrong thing to worry about. Another illustration of the power of “experts”, huh?