We encountered this merging our elementary school boundaries into their corresponding middle/high boundaries. Gaps and slivers in the contributing elementary polygons shows up in the middle/high boundaries as the same phantom lines. My advice would be to clean up the input polygons where those lines are showing up and attempt the merge again until you get it ...
It may not be a perfect result, but you can try to fill in some of the gaps by applying a positive buffer to the shape before it is dissolved and then a negative buffer to the dissolved shape.
CREATE VIEW Product
,GEOMETRY::UnionAggregate(PL.SHAPE.STBuffer(1)).STBuffer(-1) as Shape
FROM ParcelProductInfo PPI
JOIN ParcelLayer PL ...