Marcere meant to droop like a faded flower when I did Latin! I suppose you might stretch that to: "to be crushed", but it's a big stretch and not one that I'd undertake.
As far as I know, there's no connection between the god Mars and hammering. The god Vulcan, yes, but Mars had other activities to keep him busy. I'd stick to the old explanation - a simple diminutive, Little Marcus.