I find it so much easier to sell ammo. I use semi autos exclusively, even without the ammo perk I am constantly in the 1k range of .38 & .45 ammo. Much easier to travel with. Much easier to not have to build, repair, and deal with purifiers. If I had the ammo perks I would be absolutely swimming in extra ammo.

If you leave too much water in the work bench it will stop it from updating until you remove the water, it can also happen with other forms of aid production, like mutfruit and corn. Only caps reliable build up

I mostly just sell it to my own vendors at Sanctuary. I've got all of the relevant perks maxed out and all of my own vendors have over 1000 caps each. Fast traveling around the map isn't that bad though. There are like 9-10 vendors in Diamond City alone, so you can offload a ton of it there without really spending much time in a loading screen. I've invested an additional 500 caps with all of the Diamond City vendors as well.

I mostly just use water in place of caps as currency. If I need to buy something, I trade water for it.

You trade stuff at vendors. Caps is just how you keep track.

Yes, I have 320 water at the castle, its stop at 210-230 for me.

Moving it to another container and it fill up again.

It's working fine for me.

I'm still producing more than I can sell. I've got a chest that holds about 5000 bottles right now. The vendors don't have that kind of caps, unless you do nothing else than travelling from hub to hub, just to sell water.