Don't have a definitive answer for you as I haven't gotten past the classical age in this game, but I have heard that you can eventually make underwater cities. Perhaps the resources you see are only accessible at that point in the game.
Yes that is what the modder wanted. It to only spawn in water. It should be "linking up" the same way fish do. If not then it is a bug, probably in the XML for it or the Extraction Facility which is the improve.
edit I answered way back at the first post but it did not take for some reason
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