I have actually just found the answer to my question:
in the SUBSTITUTE function you can have multiple pairs, e.g.
SUBSTITUTE("boat", "b", "c", "a", "o", "c", "b"

= "boot".
First the "b" is changed to "c" in the normal way ("coat"

, then the "a" is changed to "o" ("coot"

and so on. I do not know in which version of Mercator this enhancement was introduced. I do (now) know that there is no limit to the amount of pairs you can have, within machine resources.
Thanks for your interest.
Umbogo