The people you see as blobs in the Research Halls are mostly people who are in the progress of transitioning to emissaries so that mankind can communicate with the great-ones. They failed horribly and the Hunters and church need to atone for the sins they committed in that dark lab. Which is why it's there in the Nightmare, to forever remind them.
The closest they got at the time were, in fact, the Living Failures. While still a failure, they could command slight aspects of higher powers when together, and minor things when alone.
The flowers are mostly there to grant peace. Apparently they calmed the creatures somewhat and were used as a form of therapy in the hopes of keeping the emissaries sane during their process of accention.
This is all pure speculation though, and based on a few dialogues etc. - taken from http://www.gamefaqs.com/boards/805577-bloodborne/72906864 (user Raeng)