This does pose an interesting question. Which is more likely? Disney made the surface of the tropic waters look European, or Disney made underwater Europe look tropical.

I think its a reasonable point that the original cartoon wasn't even trying to be Danish, not to mention the plot being just about the furthest thing from the original Danish story. Disney effectively took the title and two plot point and made the rest up themselves, which is in retrospect a lot more creative work than they usually put in.