For those knocking PayPal, you have to consider the level of fraud they deal with. In the past, it was merchants who were getting robbed left and right because eBay was in control and it was usually eBay sellers getting stiffed or having holds placed on their funds. Now that PayPal is finally free of them again (thank God), they've gone back to their ethical ways and taking a fairer approach to disputes when merchants actually provide proof of delivery.
The merchant is the one who should be providing you the tracking number. I provide one to every single customer automatically by using PayPal's shipping labels. If your merchant did the same or manually entered tracking on your PayPal invoice, then that's where you'll find it.
You can't blame PayPal for what other people do. PayPal only has so much info to go by to make a fair decision in a case, based on that info. If the seller is providing a fraudulent delivery confirmation, I believe PayPal has a way to determine that (I could be wrong). If you get your hands on the tracking number, call the shipping company to see if they can figure out where your package ended up. You should also check with neighbors in case it was delivered to the wrong address.
I have had a business account with PayPal since shortly after they became PayPal and I have never had a single issue. I've only had to file a dispute once against another seller who was simply ignoring his shop and not shipping orders. Of course, I don't do business on shady sites like eBay, which used PayPal for its own financial gain. Why refund merchants and give back the fees they generated on the sale?
Let the sellers eat it because customer fraud is profitable was basically what merchants were dealing with there (and still are now that eBay has its own payment processor). eBay and eBay alone is the real culprit behind the bad reputation PayPal has been given up to this point. They actually perpetuated the fraud happening on their site and bought PayPal so they wouldn't have to refund so many merchants. Take it from someone who was around from practically the beginning to watch it all transpire, hearing it from so many eBay sellers even though I never sold there.