Yup, that is what I was thinking. If you stick with the egg crate as the retaining wall, water should still be able to drain off the land as needed. You could even cover the wall with java moss to hide the pattern. Java moss is easy to keep and would look nice. But either set-up would work well, just a matter of what is best for you and is the easiest to maintain.
As for tank inhabitants I would look into salamanders, newts, or frogs as possible options. I understand some of these either eat or would poison any fish in the tank, so just check them out first. Hopefully someone else can give more ideas.