Rough Waters are small patches across the First and Second Sea which will halve your boat speed while going through them. During the night in Rough Waters thunder clouds form, so be careful not to be struck by lightning.
Sea Beasts and Krakens can spawn in Rough Waters if there is a player boat (so you can geppo through them without any risk of them spawning). Sea beasts can spawn in both the First and Second Sea Rough Waters and Krakens will only spawn if you are in Rough Waters within the Second Sea by a rare chance.
As of Update 4.5, directly on the east side of Transylvania a little bit into the water, you will encounter Rough Waters. It's best to face your boat towards the island so Sea Beasts and Krakens will be closer, and easier to hit. For the First Sea it is to the north part of Marine Ford near the ???? Shrine.
It is highly recommended that if you are aiming to spawn these bosses that you have a high Bounty, at least 20k, higher bounties give faster spawns. It is also recommended that you have people who use Fighting Styles or Devil Fruits with more range, as you can spam your projectiles and effectively kill Sea Beasts and Krakens faster.
Another recommendation while farming these bosses, try to lure them to a nearby island so killing them can be easier. A Pika user is best for this as they can use Pika Flight to aggravate the boss and bring it back to the island for others to do damage. A Coffin Boat or remotely any other fast form of mobility like a Karoo and a fruit with water-walking also works. Both Ito and tori work well for this as well. Ito's sky strings provide great mobility and can be used to save yourself from drowning. Tori users can take advantage of full form to escape drowning and quickly fly back to an island for safety. Note that while in full form, krakens can grab you, but will not rag doll you after the throw. Therefore, a Tori user can enter full form the second a kraken spawns, practically ignoring the effects of the krakens almost always grabbing you as soon as you spawn.