You must learn a special skill to tame Cloud Serpents, which is different to the skill required to tame other Lesser Dragonkin. Pandaren hunters gain the skill automatically, but hunters of other races must learn it from the tome How to School Your Serpent, which may purchased from San Redscale at The Arboretum in The Jade Forest. You require Exalted standing with The Order of the Cloud Serpent to read this tome, but the learned skill is account-wide. You can even purchase and read this tome on a non-hunter character.
This serpent can appear on any island during a Mogu invasion, which is one of a number of possible invasion events that can occur randomly in the middle of an Island Expedition. You may need to run several expeditions before Mogu will show up, and they won't be accompanied by these cloud serpents every time. Sometimes the Mogu are accompanied by 'Zian-Ti Serpent' cloud serpents, which are black with a gold sheen rather than red.
Level scaling: Most NPCs will scale with the Hunter's level, within the constraints of their level range. Hunters can tame regular NPCs up to 2 levels higher than them, but can only tame elite NPCs of the hunter's level or below.