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Think of all our engines being air cooled, with the exception of marine engines. "Water" is just another xfer medium for air to do the ultimate cooling.
As one with several rear-engined "air-cooled" cars, I have seen that:
they are more compact
they are lighter weight
but...
they are built looser and are thus emissions dirtier
HVAC not as good.
IMHO my "ultimate" engine would be a water pumper...
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