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JEMC said:
I like the idea of a Pegasus Epona. It could get hurt at the beggining of the game and not being able to fly until the later part of it granting you access to the villain's hide out.

As for the sea, why not having an underwater city like Atlantis (or like the castle in Wind Waker) where we'll need a seahorse or a turtle to have access there?

It could also be handled through levelling up of some kind. Regular horse first, which learns how to fly, and then swim through gaining some kind of experience points.

 

Also, if we're going underwater, an Atlantis type city is a must.