I've been thinking a lot about Caius Cosades and Mehra Milo these days and I love how I'm always learning new things when I get fixated on something.
I wasn't even aware that Mehra is not a name but a title that means priest. Knowing this it makes sense that her room is just called "Milo's quarters".
It is obvious that Caius is not the old man with a skooma problem to her. Probably because she got to know him well before he assumed this identy. His main public identity seems to be that of a monk of Akatosh and it wouldn't surprise me if this is how he initially presented himself to her. Maybe he visited the Library of Vivec during his first years on Vvardenfell as he gathered initial information.
Milo seems to know Caius very well in some ways, but I think that he has given her a curated version of himself. I'm also getting the vibe that he has charmed her into becoming the invaluable informant that she is by mirroring her.
"Caius is a dear friend. Like me, he admires the best traditions of the Temple, charity for the poor, education for the ignorant, protection for the weak. He is a Westerner, but he has come to love our land and our people. But like me, he distrusts the arbitrary power of the Ordinators, and like the Dissident priests, he suspects the Temple is hiding something."
I don't doubt that he genuinely cares a lot about her, but it seems a bit to me like he's gotten information out of her by pretending to always agree and emphasize how similar they are. Or maybe this is just Milo overidentifying with him. Possibly a bit of both.
When Caius is recalled to the Imperial City he thinks that he will return some day, even if it will take some time. Milo seems to be quite upset and confused by the news, as she had counted on that he would support their cause. Ultimately Caius does return to Morrowind, but apparently he is placed in Kragenmoor. Whether or not he went back to Vvardenfell is unknown.