Good luck with the psu, you may well be fine.
To address your anti watercooling points,
1: Yep, costs more.
2: Only the really die hard use watercooling by itself. Most direct water at the hottest bits and air cool the rest, e.g. chipset. So there is still air blowing around the case, it's just lower temperature air.
3: Watercooled computers do not spontaneously develop leaks, with the possible exception of extreme old age causing O rings to fail. I believe that your friends who had hardware killed by water should have taken more care. Pumping water around a computer without working out what you're doing and leak testing before use will kill components, but frankly that's user error.
That's hardly a pretty example of watercooling. I assume it was selected as such, few people would argue that watercooling is less attractive than air. Certainly radiators hanging off the back is aethetically troublesome, but it isn't that hard to mount them internally or assemble a radbox.