Looks like I was wrong! It turns out the new room is not the Tallest Mountain - it's a volcano!
I guess it makes sense now, we collected all the fire to turn on the volcano. Here's what the Sensei had to say.
"Ninjas, hear me now. Behold the great Volcano- Where we'll seek to Train.
But there's much to do, Before we learn its secrets. We must be patient."
I guess the volcano isn't dangerous. I am guessing that it will be used to help us train with the Black Puffles. But isn't it weird having a volcano on a snow covered island? Won't it melt the snow?
I guess we'll have to wait to find out!