HUD is good for the less seasoned...it really doesn't matter if it's on or off when fighting someone because by the point you can win 1v1s, flying should be based off the feeling of your aircraft (sounds/buffet/ect).
I don't have much problem with water, I find the ground looks closer so I often fly higher then normally would in AH2. That being said some wave breaks and such would be a cool graphic.
