I am -far- from an expert, but I'll give this a shot.
DragonSP is the static patcher for dragon. What it does, is puts all the statics (read: items) on your map. Trees in the forest, rocks in the grass, waves in the ocean, transitions between terrain types that can't be done with textures alone. Dragonsp does all that.
Generally, I just select everything and let it run. Too much work picking and choosing. Selecting something you don't need shouldn't slow it down much, if at all. And it eliminates confusion over what exactly is needed
Now, as to your problem. Mod11 does water, and ocean, a bit differently then mod9. Fill the ocean with the ocean color. First column, third down on the color table chart if memory serves. Now, around all your land, draw water -5 (Second column, third down. It's the first one to the right of ocean) around all your landmass for a radius of about 8-10 tiles. Now run dragon and dragonsp (Select everything). You should see some signifigant improvmant. For example, it might look normal
The reason you see that ugly brown is because your using water -5, not ocean, for everything. Water -5 isn't actually a map tile, its a static tile. That ugly brown is what you get when there is no tile there. Thus, you need to run dragonsp to place the water tiles, and the transition tiles between the water and ocean, and the water and land.
Oh, and if by map2 you mean map2.mul, that might be the root of your problem. I don't think dragon can do maps in the map2.mul format, only map0.mul (Apparently they are different. Don't ask me why, EA must have their collective head up.... nevermind.... that point was proved a LONG time ago....)
Hope this helps
