Hi Rob.
I remember Ulf´s explanation on how he made his previous diorama, and there he used resin for the water effect. Whatever he used, he ordered it from the states, so it wasn´t scenic water as that is available here. Unfortunately if you want to use the same items to get these effects, you´re gonna have to change from styrofoam as your groundwork media ... at least in the surrounding areas. If the walls are molded spackel and then scribed, and as you can see, he has used the wooden frame on the outside, this should still be easy enough. You could still use styrofoam to build up the banks, but these would need to be coved with spackel to protect them, and also fill any gaps between wall and outside frame, so the resin doesn´t leak.
The resin will need to be self-levelling to get this smooth effect and also be able to add some colouring to get it darker. This has the advantage of taking on the colours of the surrounding walls and reeds, exactly like natural water would. The water lillies can be added on top and sealed with future to give a gloss finish.
Edit. Just read the article on Ulf´s previous dio, and it was "Envirotex Lite" that he used for the water.