Loch Ness is portrayed as a clear lake, as shown in the underwater scene. In real life, Loch Ness is so murky there is only six feet of visibility. Obviously deliberately done for the sake of the storyline.
In Celtic folklore, a Water Horse is another name for a Kelpie, a rather nasty water spirit that would drown curious passersby. An odd name for a friendly gentle creature as depicted in the film.