Is it worth combining two starters for the one monster?
Yes, dreadwolf is a good upgrade
I would say so, the Dreadwolf is a great monster 
How come the dread wolf has less damage and health compared to glazio
Perhaps it was a lower level than glazio.
It was a level 99… Is that gonna effect the damage it causes
What do you mean?
At level 99, Dreadwolf is better than a level 99 Glazio.
When you fuse, your monsters’ levels and grades are averaged, giving you a Dreadwolf with an averaged grade and level. Say you use a level 90 Glazio S and a level 70 Soltusk B. You will get a Level 80 Dreadwolf A.
Your Dreadwolf is weaker than Glazio because of its low level. Train it, and it will be better
What’s its move set
Slaughter ice spikes last stand and retreat
Personally, i think dreadwolf is a good PVE monster because his moves are mostly AOE. However, for PVP, dreadwolf is a bit meh…his AOE kits are not as useful in a pvp setting and worse he is a beast type, dragons eat beast for breakfast.