I assumed you did a pre-wash of your towels before use.
See if this would stop the linting problem that you are experiencing. Wash your towels again but this time add a 1/4 cup of white vinegar no detergent. Put them in your dryer but don't over dry them. BTW..... you may notice that your towels are softer and fluffier now.
I have several different grades of MF towels in my possession ranging from cheap Costco to 300+g/m2, 550+g/m2, and 880+g/m2. I had a linting problems with my last batch and I retired all of them to other duties around the house. Not all towels are created equal.
I use this merino mitt for my full blown wash and it never shed. I only do this when the car is really dirty.
http://www.detailedimage.com/DI-Acce...ash-Mitt-P576/
My rinse-less process doesn't involve a mitt. I use 1 gallon of distilled water mix with 1 oz of ONR. I put about 10-12 clean MF towels in a bucket and use enough of the ONR/distilled water mixture to get them fully soaked. The rest of the mixture goes in to a pressurized spray bottle from Home depot.
Spray the panel thoroughly with ONR mixture then take one of the soaked towels (folded in quarters) and wipe the panel down (single direction and no circular or back & forth motion). Turn or flip towel over to expose a fresh side often when working on a panel (there are 8 sides) or as needed. Take a dry clean MF towel (again...folded in quarters) and wipe down the panel. Do a final wipe with another clean dry MF towel - this is where I use my thickest/heaviest towel ( i like to use a 800 g towel). Repeat this until the entire car is done.
To do the wheels..... pretty much the same process with the exception of the towels. I use the cheap Costco MF. I normally would spray the wheels with ONR then I would hit them with a wheel brush prior to wiping them down. If you seal your wheels with sealant, the dust and dirt will come right off.
With some practice you can accomplish all this in less than 1/2 hour. This method requires lots and lots of towel and it works. This process is known as the "Gary Dean" method. Try it.