Welcome to the forums!
1. I didn't know there is a 20 layer limit, thanks for letting me know! I guess you can't, it's probably an engine limit - at least that's usually the motivation for a limit in other game engines. The more layers on a terrain, the more rendering has to be done, the bigger the performance loss, so I assume Larian had their reasons.
2. If you want to make something like a lake, I suggest you open the Root Templates window and drag and drop a water sheet into your level. Afterwards you can scale it as you please to avoid it getting through other parts of your terrain.