On/in: You would most likely say: "Can you see the boats on the water?", or "Can you see the swimmer in the water?" (boats, birds, etc are "on", swimmers, fish, people are "in").
You wouldn't normally say "body of water" in that context. More usually, that is used to describe a geographical concept, for example: "The Atlantic Ocean is a huge body of water stretching from Europe to America", or "the island was seperated by a large body of water".
Hope that helps :)