I'll pop up a crafting bench when I'm working on the expansion, etc. but take it down when I'm just observing and/or not hanging around. I swam out far enough to drown with 132 stamina and it was still Plains but really deep. I'll expand the plot as far as I can.
Regarding the daytime spawns: I'm wondering if they may be there but are disabled when underwater. I've seen the stories of event mobs spawning in water for people that built out on islands but haven't seen anyone suggest they activated standard spawns by raising land.