Direct answer: the Lake of Rot is the poison-swamp cavern in the southern half of Ainsel River, and Astel, Naturalborn of the Void waits at the end of it. The boss is optional and easy to reach. What is not optional is the Dark Moon Ring, because a magical seal blocks the lift behind his arena until you have it.
The order that actually matters
This is the part that catches people. You can walk to Astel and kill him very early. You then hit a wall.
Behind his arena the room converts into an elevator leading up to the Moonlight Altar and the Cathedral of Manus Celes — the end of Ranni’s quest, and the source of the Dark Moon Greatsword. But a seal blocks that lift, and it does not break on its own.
To break it you need the Dark Moon Ring, and the only source is a chest in the Grand Library of Raya Lucaria, opened with the Discarded Palace Key. Getting that key requires the northern half of Ainsel, which requires the Fingerslayer Blade, which requires Radahn.
So the real sequence is: Radahn, Nokron, give Ranni the Blade, open Ainsel River Main, kill the Baleful Shadow for the key, open the chest in the Grand Library, return, kill Astel, then the lift opens. Astel being last is what makes the fight pointless if you do it out of order.
The fight
Astel, Naturalborn of the Void is an optional legendary. He uses gravity and stellar magic, drains FP, and is fought in a large open cavern. He gives 12,000 runes and drops a Site of Grace.
His rewards are the Remembrance of the Naturalborn, tradeable at Finger Reader Enia for either the Bastard’s Stars (a flail with the Nebula skill) or Ash of War: Waves of Darkness. The flail requires a genuinely unusual stat spread — 8 Strength, 22 Dexterity, 22 Intelligence — so check that before committing.
Also in the area: a tower chest holding a Great Ghost Glovewort, worth detouring for if you are upgrading spirit ashes.
After the lift
Ride up to the Moonlight Altar plateau and the Deep Ainsel Well, which links back down to the underground. The Cathedral of Manus Celes sits to the north-east. Ranni is at the bottom, past a hole in the cathedral floor, and the Dark Moon Greatsword is one of the nine Legendary Armaments in the game — it deals magic damage, scales with Intelligence, and causes frostbite.
Evidence status
Research-reviewed. Astel’s location, the ring-gated lift behind his arena, the Dark Moon Ring’s dependency chain from Radahn onward, the 12,000 rune reward, both remembrance trades, the Great Ghost Glovewort, and the Dark Moon Greatsword’s location and function were each cross-checked against multiple independent references. Not gameplay-verified on camera.