The candy basslet, Fuseling informs me, is a real fish (and SimonJM corrected me from "candy bass"). She sent me pictures of it. There is a LOT of content in the texture expansion she did for the mermaids, this is just the most colorful of those options.
Here is Candy herself searching for her friend Mr. Anemone in the Big Scary City on the reef.
Other items by Orestes, drakken3d, Propschick, zigraphix, Destiny's Garden.