It makes sense for him to be in the Sharess Caress, especially at that time: there are a lot of people coming to the city through Wyrms Crossing and they are mostly desperate. Where do they go to try and forget their misery? To the establishment, that has booze and company and doesn't ask questions.
Raphael is a devil and out for souls, so that is the perfect place to catch them. He sells seemingly easy solutions to complex problems, plain and simple.
I thought his placing there quite perfect.
And yeah, Haarlep was far too much. I would have preferred to learn more about the Hearthflame sisters instead. Haarlep would have made sense, if they had gone into Mephistos involvment in the backgraund and made that a plotpoint. And tbh, I thought, he would make an appearance in soem form, after he had so much involvment in the plot and Tav/Durge potentionally robbing him of an artifact, 7000 souls and the own son plotting gaianst him. I would even have been ok, if Mephisto used Haarlep to send a message or so. That would make the incubus actually useful for something else than nice gloves.
