I love pretzels.
Pretzel was borrowed from German Bretzel, borrowed from 12th century Latin bracellus "kind of cake or biscuit", from Latin brāchiātus "having arms" plus the suffix -ellus. According to the OED, the biscuit was so named "on account of the resemblance to folded arms".
The OED also notes "The English form with initial p- probably represents a perception of the unaspirated pronunciation of b- in regional German (south.)." But that doesn't explain how we get the aspirated /p/ from an unaspirated /b/.
Latin brāchium "arm" was borrowed from Greek βραχίων "arm", the comparative of βραχύς "short", also "upper arm" as opposed to the longer forearm.
βραχύς is from Proto-Indo-European *mreǵʰ-u- "short".
The zero-grade form *mr̥ǵʰ-u- became Old English myrge and English merry, altho the semantic development is obscure to me. With the Proto-Germanic *-þō suffix it became Old English myrgð "joy", and English mirth. So the pair merry/mirth was formed the same way as foul/filth, heal/health, strong/strength, slow/sloth, etc.