More story details will come later. I'm also still working on the fish module. I'm gonna add "arm" fins also and teeth. I'm also working on making the bubbles transparent. If anyone wishes to animate on this project (it will be volenteer work) please PM me.
I am working on an underwater animation as well. I have bubbles in mine and I use a particle layer with three different bubble sizes. You can also very easily make them transparent.
I just tried exporting one of my scenes as swf instead of quicktime and noticed that you lose a lot of effects when you use swf. If you are having trouble, I suggest trying quicktime as and output to see how things look. I lost my transparency when I tried exporting as swf.