Terraria – How big do artificial biomes need to be to spawn monsters

• The depth meter is the easiest thing to use to figure this out, but at the end of the day all these things do coincide with each other but instead of there being a graphical straight line, the background varies a little and the music fades pretty well.
• Walls can be placed with out hindering growth of the mushrooms.
• Big mushrooms are possible, I have just not seen them personally.
• No water is needed for this farm.

Hope this helps!

Pretty much all of the biomes (using Terraria's liberal definition of "biome") can be moved to another location, within certain limits.

The most extreme example is a Meteor crash site biome, which can exist anywhere, at any height. At the other end of the spectrum, we have the Dungeon, which cannot be moved at all.

Completely immovable

• The Dungeon, because it requires an unsafe background wall below the Dirt Wall depth (cannot be placed by the player).
• The Underworld, which is restricted to the very bottom of the map
• The Sky, which, like the Underworld, is just there at a certain altitude.

Mostly immovable

• The Ocean is not completely immovable, but very inflexible. It is both restricted to a certain height (above the surface level), and can only exist within 250 blocks from either edge of the map. You can create an artificial Ocean in the middle of the map, but that won't spawn Sharks, nor will it grow Corals. Creating artificial Oceans that sort of float above the real one does work; I have actually done so to farm Corals.