If I have a sentence, "No, dear, you should not." which is dialog second-person, does "dear" stay lower-case? It seems so, even though you would say, "No, Father, you should not." when the father is being directly addressed by his son or daughter. (What about "No, dear Father, you should not."?) Also, should I say "No, m'lady, you should not." when, again, Lady So-and-so is being directly addressed? Again, it would be "No, Countess, you should not." I'm confused.
Capitalization is for formal titles or names. Dear, honey, sweetheart, and the like are all endearments, not proper names or titles. Father/Mother, when spoken by children are capitalized, because that is the parent's title (or their name, as far as some children are concerned). "m'lady" is a way of addressing someone with deference, but is not a formal title like Lady or Countess.