About the underwater dwellers superior technology - what kind of technology are we talking about here? After all, they don't have any metals beyond what they can scavenge fromn shipwrecks and trade for (Sicne they can't make forges underwater), in fact there are a whole load of things they can't do since they don't have fire. There are of course lots of things they could still achieve with sea materials, but what kind of things are we talking about here?
Psionics would be one way of going about it, through using crystal psionic equipment to replace some things, but if you're not too keen on psionics then what else?