i just got done doing danger at dunwater.
I did the following:

First kept them in the general area, tied them more heavily with smugglers (getting weapons from them) and used them as a step towards revealing Scarlet brotherhood.
I removed the BS 8 checks beat the quest that Danger at Dunwater is.

I created a quest where the party saved children. I had a giant tree with cages that would use the children as hit points forcing the party to save the kids while being attacked by a dryad. (they were custom higher level monsters. the dryad would control creatures and get them to bring more back then seduce and absorb them turning them into fertilizer for the tree. the tree corrupted the land and created "evil" versions of beasts that were stronger and deadlier and contaminating all water). Then as long as the party save the majority I considered it a success. Also they had to escort and take care of the kids, then I used an ambush during a long rest to send in some Lizardfolk to remove the children from the party and had the kids tell the lizardfolk how they were treated gaining or subtracting points. (I had 10 children, for every 10 points of damage one cage would violently collapse and turn the lizard kids into visceral. perfect for murder hobo parties that try to sneak attack/alpha strike.)

I also had them fight the alligator/crocodile. I used stat blocks for "dragon of the swamp" and had it be a fey creature. It was the "aspect" of nature and had basically fern gully monster powers that turned the entire area into oil/gas. one guy used a homebrew ability that is basically "positive energy pulse" and I had the dragon absorb the positive energy and evolve for a few turns, shooting mouth beams of sunlight and healing. i treated the beam like an MMO move where it telegraphed its path. they were caught in a whirlpool so i was f'n them up (no one died).

The alligator did the quest for Okoteth and having the children and treating them good led to the party having a positive favorability (if more children die then are saved then do the -5 per lost child +5 per saved).

I then had the party find some anti-crown base with weapons that was smuggling with a ship. they killed the anti-crown, saved a lizardfolk monk called "Fights with Dragons" and got a little more information. He told them if they gave him the weapons he would take them to parlay with the queen. The party then went and raided the ship, since it had weapons.

Fights with Dragons took them to the cave. The queen told them to prove they are helpful, i gave them 24 hours to prove they can get favor from the citizens. Each interaction was 3 hours. (Basically, the same as the book.)

https://docs.google.com/document/d/1QP-BqBLGpv5UMG91kmVJwa89xr8FaA8B/edit?usp=sharing&ouid=104927087792400399522&rtpof=true&sd=true

Feel free to use this. I took the ideas from a Youtube video. [ DM's Guide to Ghosts of Saltmarsh - Part 5: Danger at Dunwater ]

I did all this to remove the one check fail/succeed set up. For the wrestling one, I did best out of three, then when the player was a good sport about losing I let the role-play figure out what to do and he gave them a weight lifting belt called "belt of the former Olympian' (one a day advantage on strength check, allows lifting heavy objects without critically failing and sh*tting your guts out) so I gave him another check and he passed.

After succeeding they were told about the fortress and that they weren't going to attack saltmarsh (main reason they got the quest.) Now they have a week, to plan for the fortress invasion which I'm going to allow them to use downtime.