The difference between the words swarmed and assembled should give you a clue as to what the answer is. Swarmed means to move somewhere in large numbers, usually crowding around something of interest to get a closer look. Assembled means to gather together in one place for a particular reason. This is usually done in an orderly fashion.
You know it’s a folk tale because we all know that nobody is going to arm wrestle an octopus. It’s just something unrealistic.
I believe it is third person limited