I'd really like to know the exact spawning area of them - especially before I encase it in about 10,000 glass.
"in and around ocean monuments" just isn't good enough.
I have already told you the spawn area is within the 58x58 boundary of the monument from the floor at Y39 to sea level at Y62. That's a 58x58x23 block area. Guardians are the only hostile mob that can spawn in that area (in Java Edition, anyway).
In the wiki section on guardian farming it says: Guardians only spawn in ocean monuments, which themselves only spawn in deep ocean biomes. Guardians spawn in water blocks within a 58×23x58 volume defined horizontally by the base of the monument and vertically from the floor level of the monument (usually if not always Y=39) up to just above the decorative structure at the top (usually if not always Y=61).
No, they only spawn from the floor level (Y39) up to sea level within the 58x58 area of the monument. Below the floor of the monument normal hostile mob spawn rules apply (zombies, skeleton, spiders, etc.).
In my guardian farm the "funnel" is at floor level, so guardians can spawn there as well, but water any lower than that will only spawn squid.
For the question of whether or not to break the monument down, or build something within the structure, that all depends on how much prismarine you want, and how fast you want it. There are some pretty efficient compact farms that output at a respectable rate, and then there are the over-the-top designs that output ridiculous amounts. My guardian farm is definitely over the top for SSP.
Check out some of gnembon's guardian farms. He really knows how to push efficiency and output to the limit.
If sea lanterns are your goal, keep in mind that it requires 4 stacks of shards and 5 stacks of crystals for 1 stack of sea lanterns, and you get a lot fewer crystals in the drops.
Another idea would be to break down the monument and rebuild it on the surface, then build the farm underneath.
The floor level is either 38 or 39 (can't remember off the top of my head at the moment). Above that only guardians spawn, below that normal hostile mob spawning rules apply. Just checked, floor = Y39.
I used light blue stained glass around mine. I built a blue orchid farm in a swamp to get the light blue dye.
That's the best way to get light blue dye, otherwise you'll use up a LOT of lapis
My guardian farm has both collection only and XP modes (controlled by a button).
For my farm I chose the brute force design methodology. I created a large floating spawn ocean that occupied the entire 58x58 monument area and is 16 blocks deep. The spawn ocean is supported on open fence gates (signs caused too much lag).
Below the spawn ocean there is a funnel that flushes the guardians over a 4x4 drop into a 4 block deep lava softener.
The trick here is to have the water flowing over the drop so that guardians don't jump. They just flow to the center and sink.
After sinking through the lava softener they bounce around on a bed of hoppers until they burn to death.
There are 4 hopper pipes feeding dual droppers that fire items into a water stream which carries them to an item elevator.
There are 4 sorters for shards, 2 for crystals and 1 for squid ink, and a final stack of chests for unsorted or overflow items (fish). Squid ink is collected by a ring of hoppers around the drop (before it falls into the lava).
The stone button switches the farm to XP mode by releasing water across the hoppers and opening a path to the kill room.
Guardians flow down to a single water source block and I toss harming potions to kill them and collect the XP.
I turned off entity cramming because it messed up the farm, and it was really designed for servers anyway (it should have defaulted to off for SMP in my opinion). I suppose you could try a larger collection area if you don't want to mess with rules.
The basic farm design has worked since it was built in the late 1.8 series, but I did have to completely replace the item elevator when they broke the old fence post based design. That also required moving both droppers to the same side (originally they were on opposite sides feeding dual fence post item elevators). So that was some major reconstruction. XP mode was also added after the original build, but I was able to do that while the farm was operational.
Guardians spawn only within the 58x58 area defined by the ocean monument, from the lowest floor level up to sea level (there is some vagueness in the wiki that suggests the spawn area may extend above sea level, but I have never tested that). Guardians are the only hostile mob that can spawn within that area, but if you clear out the area below floor level, normal hostile mobs spawning rules apply under the monument.
Guardians are far more likely to spawn inside the monument because water blocks exposed to sky have something like a 95% spawn failure rate. So you'll need to cover the spawn area if you are planning on farming guardians.
For my guardian farm I chose to break down the entire monument and make something more purpose built.
Although I do have another monument I conquered and gutted that is still intact from the outside.
I have a roof over the spawn area covered in carpet to prevent mob spawns (and to look cool).