Well, water is an important element in our lives as our body is 70% water. It also needs to be consumed daily to keep living, whether by humans, animals or plants.
Combining water with fire will obviously extinguish the fire, add water to the earth and you create mud. water+ lightning will make the water electrified, and will shock every one who comes in contact. Water will turn cold of it makes a contact with a wind, it might eventually turn into Ice if the wind is very cold.
Chakra is the energy inside our bodies that shinobis mainly use to perform techniques. Chakra can be also channeled through the shinobi's feet so he can walk on water, or channeled through his fingers if he wants to cut something..
As for elemental chakra, it's converting the chakra inside your body into an element, either fire, earth, water, wind or lightning. It is used to perform elemental jutsus.
Water release is one of the basic chakra elements, if can be used to create water waves, current, whips ... it needs a great chakra control to be performed and controlled correctly.