The figures that Floki saw by the river and waterfall are most likely depictions of the Norse goddess Hela. Hela presides over the realm of Hel - the underworld of the dead who do not go to Valhalla - and is sometimes represented by crows. She is also often depicted in black and white. Hela is the daughter of Angrboða and Loki, the former of which is the giantess Floki named his daughter after, and the latter of which the actor playing Floki, Gustaf Skarsgård, believes Floki thinks he is descended.
Iceland wasn't discovered until at least 874 when it was settled by the Norwegian Ingólfr Arnarson according to Icelandic sagas. However, archaeological evidence shows it was inhabited as early as 800.