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As asked in the title, where are those invisible boundaries? Can I build around the waterfalls on either side? Can I build my own tower on a floating rock?
You can actually reach some of the floating rocks to the left (as in, to the left of view when you enter). The invisible wall prevents you from reaching the leftside waterfall, but you can go pretty high up (not as high up as Coldharbour Surreal Estate). I'm currently helping with a build where we're making a building very high up as close to the top of the waterfall as we can get--for the views, of course!
Making your own floating rocks works pretty well, too, although we don't have a boulder that exactly matches the other floating ones.