But it slowly grew from its original 1% to the present 25% of the Earth's area. Only a drastic drop in sea level could suddenly increase the land area.

In my opinion, the land was inhabited almost from the start of live in the ocean. When the Moon was 6 times closer than it is now, about 4 billion years ago, the tides were 63 = 216 times as high as today. Thus they were hundreds of meters high and must have formed a permanent tsunami that circulated around the Earth every few hours. Such tides would drench almost all low-lying land with seawater, and leave a scummy film of whatever forms of life were floating in the ocean. Some of this would be splashed over the high-tide marks, and would begin to grow independently of the the ocean wherever there was sufficient rainfall to keep it moist.

The huge tides would also have generated a vast amount of mist containing bacteria, which would be carried by the winds and dropped on every square meter of the Earth's land surface. Again, wherever moisture and minerals permitted, this life would continue on land.