David is speaking to himself, so he uses the words "your" and "you" to refer to himself. Many translations express this with "my" and "me," as the UDB does.
Here blessing someone and treating them with great honor is described as if it were placing a crown on that person's head. The abstract nouns "faithfulness" and "mercy" can be translated with adverbs. Alternate translation: "he blesses you by acting faithfully and mercifully towards you" (See: [[rc://en/ta/man/jit/figs-metaphor]] and [[rc://en/ta/man/jit/figs-abstractnouns]])