This will only work with 1.8. And creative mode.
It works by exploiting water and light physics and glitches.
1)If you want an underwater light source without jack o lanterns place a torch underwater, it will remove itself leaving behind the light.
2)Sugar cane needs to be placed 1 block from water, but this works underwater aswell. So place it on a ledge underwater and you have reed coral.
3)For spikey coral you can use cactii, just place them on the underwater san and they'll grow as normal.
4)Fot added effect use melons, sponge, punkins and jack o lanterns for different species of coral.
5)And voila! You have yourself a coral reef with no mods!
6)PROFIT! :D:D:D:D:D:D