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Excuse my ignorance, what did the batteries need fresh water for, cooling?

Lead acid batteries, especially very old ones, actually consume water. The electrolyte is sulphuric acid diluted in pure water. When the battery is charging, some of the water is electrolyzed into hydrogen and oxygen gas. Modern lead acid designs still have this flaw, but it's much reduced and you typically don't need to refill them. Look at the warning stickers on your car battery, it's talking about hydrogen gas.

To be more specific, that is why the battery needs to be in a place that can vent.

When I replaced the AGM battery on my German car, I learned that, even though they don't vent under normal conditions, still have a vent hole. But that's paired with a pressure regulator and not for normal conditions.

Which makes me wonder: did BMW start to use AGM so they can move the heavy battery to the trunk, which helps with weight balance? Or was it an emissions thing that enabled them to move it to the trunk.

I've always wondered why they put it there too.

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