Extending the island downward looks good! However, raising the sea upward does not, as it gets rid of the lovely window you had that showed both the air and sea. It doesn't read as nicely being filled with water. I think if you keep the old water level but expand the canvas as you did, that would be the best solution. It would also put the water level at roughly 1/3 up the canvas, which looks nice.
Stone can be brown too, the brown doesn't have to be dirt. For example, many of the coastal arches off California have a brownish coloration.
The texture on the arch looks a bit rocky, so you don't have to worry about that. Of course, if you want to look even rockier, you could! I recommend looking up stone arches and coastal arches for ref, to get a feeling for the kinds of textures these kinds of locations have.
The grey stones at the base of the arch look out of place, since they don't have the same colour as the rest of the arch, and they seem to be leaning up and away from the arch, defying gravity.