Thankfully for Freddi and Luther, the hollow log is not pushed underwater by the force of the waterfall as it would be in real life.
If the Golden Pipes "may have fallen out" when the thief grabbed the conch; how did any of them end up in the organ, in the cockpit (in a locked compartment), in the Terrific Tumble Tubes ride (inside one of the tubes), in a lobster trap, in a cavern in the fun-house, or in areas that aren't even under the ocean?? The only golden pipe that could've ended up where it was just from "falling out" was the one in the clam-shell.
Freddi and Luther need to use a hollowed log as a tunnel to get past the waterfall. If they are able to do that (which indicates that there is at least some water underneath the waterfall), why can't they just swim under the waterfall?
Blenny is Luther's uncle, yet Freddi and another fish (another tourist at the festival) refer to him as "Uncle" Blenny. Since Blenny is Freddi's best friend's uncle, this is understandable for her, but not for the tourist.