Starting from the wellspring right inside the gate to the ominous Watcher's Hollow, head left and up. Follow the tunnel as it bends left. As you pass through the narrow section, into the next cave, you'll encounter this area's main obstacle.
These Stinging Anemones will make short work of your sub if you touch them for too long.
Weave your way around and between them until the tunnel turns downward.
Carefully take the branch to the right until you see the five eels. Hover around and on top of them for a few seconds, and they'll give you a treasure.
Head back to the left and into another open room where you'll meet a new enemy and a new ally.
Kill the squids with the windmilling arms and make your way along the bottom to the left until you find a small cave. Linger in here for a few seconds to receive a treasure.
Head out of the cave and up. Follow the Cuddlepup through the anemones to avoid damage.
Take the detour down and shine your searchlight on the eyes on the bottom of the tunnel for another treasure.
Either rejoin your cuddlepup or wait for the next one to escort you the rest of the way to the left. The tunnel will drop you off right above the next wellspring.
Your goal is to pass through the gate to the left, but getting there requires some work. Head up and follow one of the circling cuddlepups into the tunnel leading up and left, then duck into the hollow in the middle and latch onto the handle hanging there.
Now wait for the next cuddlepup to pass, release your claw and follow behind it. You may need to use your boost to get through the gate, but it's easy enough to try again. Just let the cuddlepups escort you.
Follow the tunnel around and down and you'll find another wellspring and the hermit crab waiting for you. Man, that guy's everywhere.
Poke around behind the crab for some coins and some more pottery to break.
Then make your way left, past the wellspring and follow the path up and around to The Maw.