The quote can be interpreted in many different ways. That's not the interpretation I had in mind. In my interpretation, fear of the unknown is synonymous to fear of change. I believe we humans are inately terrified of change, because with change comes uncertainty and the absence of normalcy and stability.
So we ignore the little voice in our heads that keeps telling us that things need to change and by the time we're 60 and close to death we realize that there was no such thing as stability in the first place and we wasted so much time worrying about the future instead of appreciating the present.
Of course I doubt that was Lovecraft's interpretation. By fear of the unknown he probably meant fear of the giant squid monster dwelling in the unplumbed depths of the sea.