quartus II libs

User Libraries in Quartus are not VHDL libraries. The user library is just a directory that it will look in for source files. So after reading in all the explicitly specified source, you instantiate an entity called gremlin but there is no entity for it. Quartus will look in your libraries(directories) for any source files called gremlin, like gremlin.vhd, gremlin.v, etc. It won't read in all files in that directory, it just looks for the name. So the library is just a shortcut for adding files to the project.

For a VHDL library, you need to manually add the file, then click on Properties and put in a name in the Library. The contents of that file will then be compiled into that library, which can then be accessed via LIBRARY and USE statements.

These are two different things that are unfortunately both called libraries. Hopefully that helps.