Boots: Personally, I believe that Elements is still not in enough of a problem state to worry. Zanz has been around recently and fixed a major bug in PvP1, the communities continues to thrive with events and activities despite the forums change, and many people remain happy.
That being said, I think more ways to integrate newbies into the community are still needed. Unofficial events with low requirements are a huge addition, and should have been started a long time ago. Things like forum games, nymph counts, chat antics...these can all pull people into the community.
Acsabi: It seems to me that a major problem for Water in wars has been not simply solid CC, but also backed up with powerful, non-instant stall cards. I can't recall as much as general deck matchups, but things like Pandebonium (when purify is not expected, of course) or Sanc Firestall seem to have the edge on water.
That being said, Water has the potential to go very far in war, if they utilize the cards they do have properly. Water is one of the best elements to use with poison, so this should be used to good effect to fill in Water's major hole - it's lack of permanent control.
Cal: Please clarify your personal question to me - do you mean an alternative card water already has, or rather a card idea or concept?
Also clarify your second question. Do you want a rainbow using all elements water has direct synergy with, or all 12? Do you mean using as in having a card of, or do creatures with abilities count? Are non-pillar/pendulum cards for each element required?