No, I meant etymologically. l'eau is apparently a real hypothesis for the loo. I shouldn't expect anyone to figure out word origin on the spot in a restaurant situation, especially if it's less likely than other hypotheses. But I encourage you to integrate etymology as a method in language learning and as its own effort.
Are you joking? I've seen the abbreviation in France, de temps en temps, but never spelt out, it being obviously not French. WC is an English term.