I like this idea quite a bit, actually. I remember there was supposed to have been a water-based champ in development at some point, but it got cut. Now the idea of a displacement based Mer-Mage, now that sounds like fun! Do you have any abilities planned out for her kit, because I might have some suggestions if you'd like to hear them?
EDIT: just noticed the custom champ spotlight you had linked, this is all very well thought out. Though I worry that giving Cerule a shield ability in addition to her displacement would allow her to completely replace Janna in function. Making her W a lenghty AoE knockup with multiple geysers (self cast like alistair's) and good AP damage ratio seems like it could compliment her kit better, particularly that it would synergize with her whirlpool, which I think would be more appropriate as a powerful semi-channeled ult (kinda like Fiddle's, so you can use Zhonya's during to avoid being demolished immediately). The tidal wave you mentioned deals damage too, right? Does it knockback minion waves as well? For E, I would suggest a skillshot that pulls enemies in a line towards you, maybe call it Riptide. Now this is the thing that really interests me about a water based champ. The big river right in the middle of Summoner's Rift. Why not have a passive that increases your AP or AP ratio on abilities, as well as movement speed, while in River? This could allow for some exceptionally quick ganks to other lanes, as well as more presence in those game-changing battles at Baron. What do you think?