There is a flexible extension you can buy for the Dremel. It works really well, seems to dampen out a lot of the vibration you can get. The things i'd be worried about are
1. The grease they use to lubricate it
2. Life of the extension (corrosion).
It uses essentially a long coil spring that spins inside a spiral wire-reinforced plastic tube, with a threaded fitting and collet on the end. I don't think using it in saltwater would be good for either the extension or the tank. It would be great if it was, though. Once you make sure you can't yank the Dremel into the water trying to get that perfect angle on the coral you're trying to frag!!