My only source is having read Russian novels in English. I wonder if the "little" water is like someone's diminutive name, i.e., meant to show familiarity or affection. Like, Mishka is the diminutive of Mikhail.
* вода - voda - water
* водка - vodka - vodka
-ie (doggie)
-let (booklet)
-ling (duckling)
-ette (cigarette)
None of which seem to work well with "water" (waterie, watelet, waterling, waterette)