Since you are talking about the majority of coral islands in general, I think it sounds better like this => Most coral islands develop around reefs that grow up around volcanic islands. No need for the 'The' in front. :) I would also probably say just 'grow around' instead of 'grow up around', but we could possibly be emphasizing the slow upward build-up with 'grow up'...

Here is the PROBLEM with your use of the word "the." When I hear a sentences that begins "The most," I expect it to continue like this: "The most beautiful coral island in the South Pacific is..." "The most northern coral island in the world is Kure Atoll..." The article "the" primes us to expect you to point to specific atolls. We can use "the most" as a way to turn almost any adjective into a superlative.

It should be 'Most coral reefs....'

I think it's fine.:)

The most coral :D