Disk Management- Merging unallocated space

Couldn't you download the Wubi Version instead, that makes an ordinary partition as you can see in my earlier partition screenshot and it works fine.

No, I hadn't known of Wubi when I first installed Ubuntu, so I just created a partition and installed it on there... I also didn't know that during the Install, Ubuntu offers to create a partition anyway, would've been a much cleaner experience than with Windows Disk Management...