Larger fish:
At the puase menu, hold Select and press L2, R2, R1, Up.

Better Lures:
Use a new lure in each of the levels in challenge mode that you meet the requirements for. Some of the new lures are:

CRANK BAIT
RUBBER JIG
NOISY
DOUBLE SPINNER BAIT

2 New Levels:
Beat the game in challenge mode.