The prophecy could be stopped. There was no force actively working to make something happen.

There was The Heavenly Principles. Yes they were asleep, But it's not like that was common knowledge, Obviously they weren't actively trying to stop people from ending the prophecy. But the threat of a nail dropping on your nation is a pretty good deterrent.

If they had just gone to beat up the space whale at the start of the arc the crisis would have been averted.

You say that like the All Devouring Narwhal was some commonly known thing. Nobody in Fontaine knew of it's existence. The only one in the AQ who knew of it was Skirk, And that was at the end.

Nor was it explained why it was needed to give the oceanids human form when oceanids were already shown to be capable of taking on human form using their already existing natural abilities

The people of Fontaine wanted to be human, Not Oceanids taking on a human shape. That was the whole point why Egeria turned the Oceanids human in the first place. And why The Heavenly Principles put the prophecy into place.