There are a few suggestions that i can make.
A: Build up, not out.
It seems a little counter-intuitive, but you want to build upwards instead of outwards. Building up doesn't make more sharks spawn in, but still gives you space. Use Stairs (which look like a ladder) to allow your people up, and pillars for a slightly cheaper option, although they don't let people go upwards. As it is, the sharks are bugged and their are way to many for the people count.
B:Making The Babies
To make new people, you have to have over 8 kebabs and a male and female have to have nothing to do. The 8 kebabs will be used, and a baby will appear. They will then grow up after a short amount of time.
Hope this helps. If you have more questions, look on the wiki (http://last-wood.wikia.com/wiki/Last_Wood_Wiki) or for when it doesnt have the answer your after (its still very WIP) make another post.