What do I do with Habd's Remains?

I picked these up at Frostflow Lighthouse hoping they'd be a decent decoration for my home, but it turns out they're a quest item.

As far as I can tell, I've already finished the quest. Is this a bug, or is there something else I can do with them?

If you re-enter the lighthouse, there is a locked door that leads to the top. You should have the key (if memory serves, it's looted some time during the dungeon) to unlock it. Climb up to the top, and eventually you'll reach the brazier. You can interact with it, which places Habd's remains inside, and lights the lighthouse. This also gives a nice permanent buff, called "Sailor's Repose" which increases healing spell effectiveness by 10%.

Neat little end to the quest.

This video shows the exact location and how to get to it: