While not especially horrifying, the fact that Ariel is only 16 throughout the movie is pretty weird.
When Ursula shows what happens to her clients who break their contracts — they get turned into these immobile, screaming, limbless worms stuck by the hundreds to the floor of her cave and then it happens to King Triton.
It happens to Ariel too, and in a more horrific way: in order to scare and threaten Triton, Ursula begins to tranform Ariel then freezes the transformation, leaving Ariel as a mermaid-worm hybrid, which is to the right. Obviously.
Several things about Ursula. She's a fairly grotesque octopus woman with pasty grayish skin. She eats live (and, as it turns out, sentient) shrimp as snacks. The entrance tunnel to her lair is carpeted with the shriveled bodies of her transformed former clients who "couldn't pay the price". She conjures a pair of wraithlike disembodied hands to forcibly thrust down Ariel's throat and extract her voice. And at the climax of the film, she transforms into a giant, saw-toothed version of herself with a Stygian voice, uses the power of Triton's stolen trident to create maelstroms and raise up the rotting hulks of sunken ships, and finally is impaled on a spear of one of said ships and sinks, clutching the hull of the vessel with her tentacles in her death throes. The directors' commentary on the Special Edition DVD noted that they probably wouldn't get away with Chef Louis (or Ursula) in a modern film. Also, she has a great singing voice.
The skeleton of a deceased sea-monster that serves as Ursula's home was a corpse when she found it. Where did all that rotting flesh go?
During the song, "Poor, Unfortunate Souls", when Ursula sings, "It's she who holds her tongue who gets her man", she tosses a tongue into the cauldron. Easily missed, if you assume that it's something else.
The fact that Ursula's final scene is stolen from HP Lovecraft's The Call of Cthulhu doesn't help matters at all.
When Ursula is looking in the mirror, she essentially squishes a clam's insides up and uses it for her lipstick, meaning she was using clam guts/clam blood for lipgloss.
The whole concept of Ursula disguising herself as a shapely young woman is pretty unsettling.
Ursula's transformation from "Vanessa" back into her actual self, which involves the bodice of her dress ripping open down the front and her tentacles spilling out. As if that wasn't enough, she then (shudder) crawls over to Ariel and kidnaps her, all while laughing demonically.
The whole scene with Louis the chef gruesomely hacking up fish while poor Sebastian runs around in terror had to have made some people become vegetarians. It doesn't help that he's singing during most of it, making him look like a sociopath right before he goes off the deep end chasing a small crab.
Honest Trailers outright calls the song "the traumatize your children song", and changed Louis's song to reflect on that.
Ursula, while not a good character, was sane and composed during most of the film. However, when she transforms into Vanessa, it's implied that she lost quite a bit of sanity (to the point of becoming a borderline Ax-Crazy) when turning into her, as she talks to her mirror in a manner similar to a schizophrenic, emits a psychotic grin when throwing a pin at a mirror's head with enough velocity to knock the mirror back, and most certainly kill a person had that been a human being, and her cackling.
Ursula's line to Ariel and the accompanying visuals: "If he [Eric] does kiss you [Ariel] before the sun sets on the third day, you'll remain human permanently! But...if he doesn't, you turn back into a mermaid and...you belong...to me!!!"
The aftermath of Flotsam and Jetsam's destruction, as well as Ursula's. First when Ursula says, "Babies! My poor little poopsies!", you can see an eye and remnants of the eels, and after Ursula's been destroyed and the trident's sinking, the remnants of her are sinking to the bottom, even as the merpeople she's tricked into making a Deal with the Devil change back, and quite possibly showering them in it.
Triton destroying the grotto and everything in it. He looks like a large, Satan-esque figure, and the whole scene resembles something from the bowels of Hell!
The preceding argument is also pretty cringe-worthy.
"So help me, Ariel, I will get through to you. And if this is the only way...so be it.
Listen to the scene without watching it, and it's even scarier. It sounds like a child begging her father not to beat her.
The music, during that scene; from the creepy build-up during the argument to the blaring horn stings and timpani drums when all hell breaks loose.
Let's be honest here, just Triton being angry is terrifying by itself.
Sebastian seeing the cooked seafood, ending with a dramatic sting on the stuffed crab.
The first time Ariel meets Flotsam and Jetsam with their creepy, echoing voices.
In the stage version, we get some pretty horrifying backstory on Ursula: She's Triton's sister, first of all, and they had about seven other sisters, all of whom Ursula arranged accidents for or outright killed through different subversive tactics. Then she moved on to Triton's wife, and was afterwards banished. All this in hopes of becoming the kingdom's ruler, and she damn well nearly succeeded.
It gets worse. The deal with Ariel, and the subsequent attempts to sabotage her? She wants to destroy everything brother dearest loves, just as she herself had everything taken from her.