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Also, remember the hippopotami! And possibly penguins.
ETA: While penguins are a southern hemisphere species they don't all live on Antarctica where there's always ice and snow, so Hopper (a rock hopper penguin) especially would be very appropriate.
Lily is a frog villager, I think she's be a good choice. I personally really like Alfonso, a crocodile villager (he's in my wild world town, and I think he's great)
For species I think you should go for frogs, crocs, hippos, and ducks! Maybe even elephants too, I would think they fit the theme
Definitely agree with the octopus villagers! Hmm other than what other people have already said, if you have access to them the new splatoon villagers Cece and Viché could also work?
I don’t have any suggestions besides what others have already said, but I’m really curious about the design of your aquatic island! Is it going to be large bodies of water, or are you keeping lots of land and decorating with aquatic-themed furniture like the fishing tourney items and mermaid set? I’d love to visit when it’s done!
I was going to suggest some of the birds, but the ones that would really go great are sadly npc like the pelicans. There's still Flora (a flamingo) ducks, frogs, and octopus. But now that I think about it, there aren't a lot of choices for aquatic villagers or even semi. Wardell would be great, but again he's an npc.
You might have to get a bit creative with your villager choices so you can have some villagers that are more fish-like and not just ducks and frogs. Oh you also have alligator/crocodiles to chose from! And hippos. It really depends on what kind of theme you're going for.