I frequently find myself gathering lots of loot from fallen foes(mostly from random encounters), but can never seem to barter it all off. Most of the merchants I come across have very little money, so I end up not being able to sell off a lot of the expensive loot I find. Am I missing something? Am I just looting too much? Also, do merchants restock on money and other things?

It's normal that you can't trade everything you find for money, the amount available in the wastes isn't that high, no merchant has more than a few 1000, most have less.
Merchants restock every few days, some faster, some more slowly.

I recommend trading your gear you can't trade for money for weightless stuff like normal stimpaks (you can carry hundreds of them without disadvantage) or drugs. Shops accept trading items, don't give money away if you don't have to.

Only take what you need... Money is not important... I don't collect any caps what so ever... I just trade now and again.

And dont forget to steal the stims from the NCR guards

Trade everything for stimpaks and you'll be invincible. Also, if you have a gun that uses the more rare ammo, it's obviously good to keep trading for that. There are very few things to do with money in the game, so trading goods for goods is generally the way to go.