Those big fluffy "ears" are actually its rhinophores, gill-like structures used for smelling. The fluffy things towards its rear are the actual gills, and all the little bits of "fluff" are actually papillae, little tentacles used for feeling/tasting their way through the world. They have simple eyes underneath their skin that they use to detect light and shadow. They can store the stinging cells of the hydrozoa they eat (little critters related to jellyfish) and use them to stun other prey.