Learn Finnish: Isän vanha rannekello lienee täällä. - Father's old wristwatch is probably here.

The potential mood of olla is highly irregular. Instead of building on the regular stem, it uses the ancient verb root lie-. The marker for the potential mood is -ne-, and since this is third-person singular, the final vowel is lengthened, giving us lienee (is probably).

Is there a practical difference between using lienee and just saying on varmaan?

The difference is mostly in tone and register. Saying on varmaan täällä (is probably here) is the standard way to express this in everyday spoken Finnish. Using the potential mood lienee täällä means the same thing but sounds more elegant, literary, or slightly formal. You will encounter it often in journalism, literature, and educated speech.

How do I change lienee if I want to talk about multiple watches?

You keep the liene- stem and add the standard third-person plural ending -vät. So if you were looking for multiple watches, the sentence would end with lienevät täällä (they are probably here).

Why use täällä rather than tässä for "here" in this context?