No. There is no way to get infinite water in the pack. That is a defining feature of it. You always have to balance production of water vs use. That said, remember you can turn a bucket of water into 4 fresh water usable only for cooking. But making stuff like dough is always going to cost you resources.
Nickel is ferrous metal. Once you get a smelter up and running you can toss nickel blocks in with iron to make invar. Before that, get a grind stone. Cook the nickel into ferrous bars, then grind up the bars ferrous dust. Then grind iron bars to make (the correct kind of) iron dust and combine them in a crafting window to make invar dust, which you then cook for invar bars. Obviously, the smelter is the better way to go and I recommend getting one running as soon as you can. For the ore doubling if nothing else.