I found it from the coords on the image you posted. I built a public storage near the water, on the ground. I might continue work soon.
There's a small shelter with a bed I built into a cliff some time ago a bit north of the storage.
But yes a small village with public sleeping center, forge, station, mining central potentially, would be nice.
Line 2 ideas:
Blue Ink Factory - Earthquake Forest - Quonbla - Swamphold (- Jungelot - Darvwnse-a)
Blue Ink Factory - Earthquake Forest - Novascotchara - Jungelot - Swamphold
Potentially, one of the rails going the other way from Spawntown could be extended along the route going through Novascotchara, and head to Jungelot from there, then to Swamphold or Darvwnse-a. And line 2 could go through Quonbla and Mudkipzania instead. In any case, there are many unused routes heading south of Spawntown compared to north.
Maybe Swamphold should annex Jungelot, which would turn into the municipality Jungelot Cove, since it's small anyway.