With a different texture this could easily be an Argon Jungle border plant. Keeping closer to its current appearance, Orethan or Telvannis would be other possibilities, I think.
Looking for a large multi-cell grotto. Additional cells should be accessed via the door_load_darkness00 (Dark hole) Door. The grotto will be filled with Slaughter fish in the 1st cell, then Dreugh and possibly Cephalopods in the other cells. There should be few air pockets, with possibly none in the lower levels.
I would suggest using the larger cave pieces so that the Dreugh can freely attack.
Mud/Mold or Bone is acceptable.
Note that the door does not show up on the UESP map (there was no interior for it).