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The final shots we see of Simon show him being assimilated by the blood ocean. We hear Simon's screaming gradually distort into a roar, and there are fang-like teeth growing on the side of his face:

The blood is mutating him into another monstrous fish. This implies the voice speaking to Simon had once been human too, but had since become the monster we've seen throughout the film, having burst out of (not bitten into) the SM-8.

The voice says, "We can save everyone, within us!!" which makes sense if we recall the line from earlier in the film about the blood ("It's us"). It's stated that the blood is human blood, and may even be what remains of the humans that were taken in the Quiet Rapture. As people (like the woman from the SM-8, and like Simon now) are sent down into the blood ocean, are irradiated, and mutate, they are absorbed into a sort of hive-mind connection with the blood itself. (It's sort of an antithesis to the repeated refrain of "It's bigger than us"...no, it literally is us.) Simon and the ship are already part of it--an iron lung, built by what is found in blood (perhaps distilled from it) and refilled with oxygen as if the blood is a body using it to breathe.

Then we follow Simon under the surface of the blood and see the following shots (I've taken down the saturation for clarity). The tree pendant cracks and shoots out tendrils:

Simon resurfaces, and his eye (below) flashes and changes color, becoming more like the giant eye we've seen throughout the film. His mutation seems to be progressing.

It cuts to black and the voice says, "We live." Then it cuts to an exterior shot of an explosion, ripping through the monster, and dark shapes start to shoot out from the center of where the ship had been.

Some people have interpreted this as the completion of Simon's transformation, but it isn't. This isn't a fish or even a tentacled sea creature. It's a tree. The trunk is the upper portion, and the roots are the tendrils spreading out towards the screen.

Simon's choice to hold onto hope allowed what was intended for evil to be used for good. The piece he carried of the Last Tree touched the blood, and, as if to fulfill what Eden had said ("our bodies will become the soil"), used it to grow, destroying the monsters as it did. The blood can nourish something now ("we live"), as it is meant to, even if (just as with the data) we don't get to see what it becomes.

There is a really funny synergy between two deltarune theories nobody is considering

bonus:

passing like a kidney stone

that would be great thanks