So the process works more or less the same way as for normal fishing, but you have chance to catch sandfish. As far as I know it's not used in any quest, but you can use it as a food source, quite a good one (regenerates for 11 minutes). Fishing there increase skill, yes. Not sure about the Here, fishy, fishy ach, but my blind guess would be it doesn't. Also catching sandfish requires more effort than regular fish, so it wouldn't be the most efficient way to do so.