Most of the horror in Lovecraft's works come from the buildup of tension and the overbearing sense of dread. Really, save for a couple of moments in the novella, Mountains is easily doable in a PG-13 film. And those couple of moments can be filmed in such a way that the gore isn't so explicit or graphic.
We've got horror movies out nowadays sneaking away with a PG-13 rating. Can't see why this one couldn't as well.
At this point, I just want this movie made damnit. Anything to wash the taste of Pacific Rim out of my mouth.