Mostly surrounded by water (2,3,4)
I believe the answer is:
in the main
'mostly' is the definition.
(I've seen this before)
'surrounded by water' is the wordplay.
'surrounded by' becomes 'in' (being contained in).
'water' becomes 'the main' (the main is an old name for the sea).
'in'+'themain'='IN THE MAIN'
(Other definitions for in the main that I've seen before include "Where piped water collects" , "On the whole" , "Where cod and haddock may be found" , "Where schools are found" , "Frankfurters may be dipped here" .)