Whenever you cast a Merfolk spell, create a 1/1 blue Merfolk creature token with hexproof. (A creature with hexproof can't be the target of spells or abilities your opponents control.)
If an effect refers to a "[subtype] spell" or "[subtype] card," it refers only to a spell or card that has that subtype. For example, March of the Drowned is a card that benefits Pirates and features Pirates in its illustration, but it isn't a Pirate card.
The ability of Deeproot Waters resolves before the spell that caused it to trigger.