Wind moving through marsh grass makes it look like a sea, and the speaker lets that comparison grow until it takes over the whole poem. The grass ripples, but there is no spray and no crashing surf, so the "sea" feels strange and unreal. The speaker wonders what might lurk beneath it, and the poem hints at creatures or things "undreamed of" hidden in the dank cover.
Gradually the mood shifts from eerie curiosity to a kind of drifting reverie. The speaker and others imagine sailing this sea on a "tide of dreams" toward unknown islands, guided by sunlight or a cringing moon. The sound of the wind becomes a faint, elfin murmur, maybe distant surf.
The ending turns darker. The sea of changing light carries us toward "wild chasms of the night," and imagination, usually eager to explore, stops short, aghast. The overall feeling is wonder tinged with unease: beauty that slowly becomes a little frightening.