I haven't heard that IPA is much worse than ethanol though, beyond what's stated on Wikipedia ("somewhat more toxic"; ethanol is obviously toxic as well). Should I be more concerned about using IPA?
The white residue is a separate problem. Alcohols are not perfectly effective at dissolving all the components of flux residue, so you often get white crud left over. It's harmless, but ugly, and sometimes you just need a clean joint. I think it is possible to get this stuff off with alcohol and some skill, but who has time for that? Just buy proper flux remover.
The best flux remover I know of is MicroCare SuprClean or PowerClean (they're very closely related, but definitely at least a little different; either way it's hard to tell them apart, so go for whatever's convenient). It is supposedly nontoxic (but remember they once said that about the last flux remover that got banned... and the one before that... and...), readily available from the usual places here in the US, and very, very powerful. Careful cleaning with it will not leave any white residue behind. (Careless cleaning will lead to the observation that flux remover solvents dissolve soils... which means the soils are right there to be redeposited should the solvents evaporate... so you have to actually manage to get the crud off the board if you want it clean. Dissolving alone is not enough!)
I haven't done an exhaustive survey of flux removers, but this stuff certainly does the trick. I was originally looking for something that could dissolve Krytox residues (long story) and while I thankfully never had cause to test it, this stuff is based off some member of the Vertrel family, which is one of the few things in chemistry capable of that job. And anything that can even threaten Krytox is probably a tool worth having!
Not really. The entire planet was rubbing it on their hands for years during the pandemic. It'll dry your skin out, sure, if you're getting a lot of it on your skin, but you shouldn't be if you're not using it as hand sanitiser, and of course you're not drinking it.
Nearly any properly designed board will not hold residual voltage for long when disconnected from power, so the slight conductivity of tap water is a non-issue.