Head right from the wellspring and pass a headless statue. Some nettles will attack, as will a new enemy, an anglerfish.
Head up from the anglerfish fight and smash your way through two gates on your left to pick up the statue's head.
You'll have to fight your way back to the statue through more nettles and a respawning anglerfish. You can even use the head as a weapon. Just keep track of where you throw it.
Once you place the head on the statue, the gate next to it opens. Pass through and go break the gate to the left for the coins.
Turn around and head down a little to find the handle that will open the next gate. You might have to use your boost to make it through in time.
Follow the path around to the right to find the next wellspring.
An angry-faces mine will pop out from a contraption on the ground. Don't try to grab the mine itself because it will explode. Instead, grab the base of the chain.
Carefully maneuver the mine up to the ceiling directly above you to open up the path.
Before you move on, though, go back down and grab another mine. Carry it up and out of the hole you just made and use it to blow a hole in the wall to the right to gain access to a gem worth 100 coins.
Return one more time and grab a third mine. This time carry it all the way up and to the left to blow another hole in the ship.
Go through this hole and to the right for the next wellspring.
Carefully work your way left and up through the moving mines to grab a coin. Try tapping the the boost for the little bursts of speed you'll need to avoid getting hit. Stick to the ceiling and continue right to grab a silver treasure worth 50 coins.
Drop down and continue right for the next wellspring.
You fight several enemies here. After dispatching them, head to the right and break the gate. Follow the path down and to the left. Break the next gate as well and continue down.
The next room is a dead end with your current capabilities, but if you can avoid the spotlight, there are a couple gold coins to make the trip worth the risk.
Head back the way you came and continue up. Take a right into the shipwreck and stick to the bottom.
There's a periodic current that flows along the top that will push you into the gate, but there's no way to open it up there. The handle that opens it is on the bottom. Trigger it and wait for the current to stop before you let go. Make your way up to the top level and boost your way through the still-open gate to grab a silver treasure. Then, use the handle above you to exit.
Keep heading up and turn right to find the next wellspring and your buddy, the hermit crab. You should have at least enough coins by now to grab the Claw Extension.
For now, you can ignore the skeleton that really, really wants you to head to the left and up a little. You'll need a way to get past the giant stone heads before that path opens up.
Instead, head down between the wellspring and the crab and follow the path as it zigzags its way through the giant ship. Keep heading right until you see a giant barrel. Your goal is to knock it loose so that it will roll down and sit on the button. Push it even further to the right using your boost and then get out of the way.
Make sure the barrel settles in on the button and pass through the gate to the next wellspring.
Once again, you'll see a mine. Carry the first one up and blow a hole in the ceiling.
The second one is tricky. You're going to carry it up through the hole you just made, to the right, and then diagonally upward to the gate you can explode. The best way to handle this is to let the mine's momentum and buoyancy work for you.
Try to build up a head of steam and then dive to the right to avoid the mine hitting the ceiling. This will almost certainly take you a few tries, where a few can be anything from two to one hundred tries. Exploding this particular chunk of wood, though, produces a satisfying change in the orientation of the shipwreck. Follow this new path down and to the left to the next wellspring.
Keep heading down and you will encounter a few enemies as well as something we'll call a Tyne Tether Tractor Beam. This appears to trap you, but it's possible to break free with your boost.
Keep heading generally down and a little right to trigger a fight against a Formori Sentinal. Use the bombs in the bottom corners of the room and boost-toss them at the Sentinal.
Three direct hits should do the trick.
Head to the top right corner and pull the chain to open the gate.
Turn right for the wellspring and another Tyne Vortex.
After saving, head up and to the left. Avoid the current and make your way left to the barrel.
Push this barrel uphill until the current lifts it and drops it on the button. This will open a gate to the left.
Head through the gate for a few gold coins and a hull fragment.
Open the gate and exit. You'll be back at the wellspring before the Sentinal fight. Make you way back to the vortex and head right and down to find some evidence of Merryn's father.
From here, head straight up. Ignore the shiny anchors for now and keep going. You'll trigger a fight with an electricity-spitting crab.
The ball of electricity meanders out when the crab claps its claws together, so you have lots of warning and lots of time to get out of the way. Use your boost to swing around behind the crab and attack his exposed (and glowing) backside with your claw.
Once you've defeated the crab, you can go grab one of those anchors. Take it up and to the right and feed it to the giant clam to get a treasure.
Head directly left from the clam until you see the deck of a sunken ship and a board you can break through. Break it and kill the nettles inside.
Ignore the chest for now and head to the bottom. Push the barrel up just a little past the button. As it rolls back across, boost your way through the open gate.
Collect the coins on the other side, then head down to the wellspring.
Hit the glowing red lever above you to open the gate, then carry a mine up and through. Watch out for the nettles that appear and make things interesting.
Take this one up and to left to open a hole into a room with a golden treasure.
Before heading back down to grab another mine, follow the deck of the ship down and to the right. Head down and use your claw to grab the anchor hanging from the chain. Keep pulling until it breaks free.
Head back, grab another mine and bring it back here. Right below where the anchor was, there's another gate you can explode.
Follow the path to the right and down, and you'll return to a new area of Watcher's Hollow.