Cleon
Legend
I generally agree with Cleon here.
On the reflection bit: were 1e psionics pretty much all mind-affecting? If so, let's go with Cleon's suggestion. If not, let's use something based on spell turning.
After some rumination, I've got a couple more points to raise.
Firstly, ordinary horseshoe crabs crawl along the bottom, they don't swim. I've given the magical version a Swim Speed of 50 ft., but we may want to cut it out. Note the Monstrous Crab doesn't have a swim speed, but IIRC the AD&D Giant Crab did have a slow swim speed. Also, they're almost as fast as a human (11"), so I'd up the Crab's land speed to 30 ft.
Secondly, horseshoe crabs don't have long claws like some regular crabs do. Their relatively short claws should have a similar reach to a Monstrous Scorpion or Spider of the same size, or 5 feet for a Large individual.
Thirdly, are we making these things Amphibious? Ordinary horseshoe crabs can crawl onto the land for a while, so they ought to at least have Hold Breath. I think we should leave them Amphibious.
Fourthly, they can burrow - but I'd add a note they can only do this through light soils, mud and sand.
Fifthly, I'm not so sure about using the standard Improved Grab & Constrict routine for them. The original monster doesn't have a constrict attack. That said, I would like to do something with the "On its underside the crab has a sucking mouth flanked by two crablike claws. Behind this are bony, grinding ridges that crush food; all that a crab seizes is passed here by its claws and then transferred forward into the mouth, which will regurgitate undigestible material." So how about using a Dire Ape's Rend - if it hits a victim with both claws it pushes it through the "crusher" for an extra 2d8+7 damage?
Seventhly and finally, I'm wondering whether we should change the SLAs to some kind of electricity-generating Supernatural Ability. It seems rather dim to be casting spells.
Putting all that together, we get something like the following. If you're OK with it we've only got the Feats, Skills and Challenge Rating to argue about:
Horseshoe Crab, Giant
Large Magical Beast (Aquatic)
Hit Dice: 6d10+9 (42 hp)
Initiative: +0
Speed: 30 ft. (4 squares), swim 50 ft., burrow 20 ft.
Armor Class: 18 (–1 size, +9 natural), touch 9, flat-footed 18
Base Attack/Grapple: +6/+15
Attack: Claw +10 melee (1d4+5)
Full Attack: 2 claws +10 melee (1d4+5) and bite +5 melee (2d8+2)
Space/Reach: 10 ft./5 ft.
Special Attacks: Rend 2d8+7, spell-like abilities
Special Qualities: Amphibious, immunity to mind-affecting attacks, low-light vision, reflect mental attacks, scent, vermin-like
Saves: Fort +6, Ref +5, Will +2
Abilities: Str 21, Dex 11, Con 12, Int 2, Wis 11, Cha 13
Skills: 9 Hide +, Spot +
Feats: 3 plus Toughness (B)
Environment: Temperate aquatic
Organization: Solitary or colony (2–10)
Challenge Rating: ?
Treasure: None
Alignment: Always neutral
Advancement: 7–11 HD (Large); 12-18 (Huge)
Level Adjustment: ---
Combat
Rend (Ex): A giant horseshoe crab that hits with both claw attacks latches onto the opponent’s body crushes it between bony, grinding plates behind its mouth. This attack automatically deals an extra 2d8+7 points of damage.
Reflect Mental Attacks (Ex): All mind-affecting attacks targeting a giant horseshoe crab are automatically turned back upon their original caster. Area effect attacks are not reflected. The attacker saves against the attack as normal.
Spell-Like Abilities (Sp): At-will—shocking grasp (DC12), 3/day—lightning bolt (DC14) at caster level 5, the save DCs are Charisma-based.