Great setting set-up. Good ticking clock with the red beacon as well.
I'm not clear on how the merfolk can still move about, given that other aquatic creatures are beached at this point. Do these change to having two legs and breathing air when necessary?
Untrustworthy talking sea serpents, telepathic starfish, ghostly horses, squids that grow two tentacles for each one that's lopped off, this has amazing Appendix N vibes.