Deep within the Mort Myre Swamp, the Nature Grotto is hidden in a tree that is only unlockable during and after the Nature Spirit quest. The tree itself is in the middle of a small island, which can be accessed by jumping across the broken bridge south of the island. Filliman Tarlock is found here.
Around every 5 minutes a green glow surrounds you followed by the message: "The aura of Filliman's camp protects you from the swamp."
It is revealed in Burgh De Rott Ramble/Temple Trekking that the grotto itself used to be surrounded by swamp plants until "the evil" (possibly ghasts or shades as mentioned by the spirit during a dialogue with him) set fire to a plant(s) and it spread to nearly every other one; the player had to extinguish them.
The Nature Grotto may be a reference to Yoda's hut from the Star Wars trilogy. Both were small, made from dirt, tree based, in a swamp filled with dangerous creatures and inhabited by a green being.
Long before Filliman arrived, the grotto was inhabited by a female nature spirit named Yarra, who was mentioned in Ivandis Seergaze's diary. Her ultimate fate is unknown.