Yes, I imagined it - as in life - inhabiting the wall, ionexch (but, failing that, the line/wall can be drawn with the letters on the inside and it will still satisfy the conditions set out in the preamble).
It's another one of those where we're having to guess what's in the setter's mind. My biggest problem with the other way is using two of the three blanks for just one creature, although I'm not keen on the cramping either (or the reversing, come to that) but your guess is as good as mine. I enjoyed the puzzle, so I'll be happy either way.