The priest does his best to explain the principles of governance and ethics.
The duties of a moral government are to look after the best interest of the people. The job of a ruler is to figure out how to make people as fulfilled and happy and safe as they can be. Listening to their concerns is good but doing exactly what the people ask for doesn't turn out well, random people can't see the long-term consequences of what they want or don't take into account what other people want and so on.
When the priest talks about Goddess Hylia and the lessons of mercy, compassion, etc, there's some kind of... Disconnect. The religious aspects and Hylia's teachings probably work better if people have a sincere respect and awe and devotion for the Goddess.
There are stories from when slavery was ended here and there in Hyrule's history. Resettling former slaves and giving them a lot of subsidized housing and food and help finding jobs and friends seemed to work the best in the long term, out of things they tried. Some people are just not capable of peaceably participating in a society. Finding them slightly different societies - a soldier's life instead of a craftsman's - doesn't always work, either. At some point it's not worth it and you need to spend effort more efficiently, on things that will benefit many people.
Proper incentives for people are very important. In a moral society most people are good but not selfless, so you need to make it easy to be moral and difficult to be immoral when possible. General education is important. Good education ensures every person has the ability to participate in society even if they end up with no friends or family.