Try creating a new terrain (try same size terrain as your mainland, or you can make multiple smaller terrains to fill certain spots), use NAT_water bases from resource manager.
Create the "holes" you want and put in the water terrain, move it down slightly and you have your water holes.
Note that when you generate AI, your character will walk on water. use the ai paint "block" to disallow your characters to walk on water. Unless you're making a Jesus mod, then thats cool I guess.
