How water could work
So, I've in multiple threads on steam that the implementation of water would most likely kill PC's with performance and such, but I do have a few ideas about how it could work without having to kill PC's and Consoles.
First is taking notes from Subnautica; not really using liquids that will require physics, but an immovable plain that sets a dig and fly boundary for players and/or ships. All you would have to do is change values with certain state modes on the physics of the individual player or the ship, i.e. making ships have minimal gravitational pull yet require more fuel to move around while also increasing drag, for both players and ships. call it a "trigger" if you will, for when you enter the water. And impacting the surface too hard will damage your ship like you're running into a layer of heavy armour. for flooding the ship, again, take notes from playing Subnautica: use animations of water entering the ship like air does escape in a vacuum, while using a rising water texture during the process. (As a side note, I'll let you decide if it weighs the ship down if flooded.) All you need to represent water out of the body is splash animations and particles affected by gravity.
I'm gonna supply context with the gameplay trailer to show off my point.
If rendering is a problem, the game only has to load certain chunks of the visible surface of the water instead of an entire ball, and add onto it as the player drills land. When viewed from a distance, a blue sphere is all that's needed. You don't need to create oceans for it.
The basic summary of this, though... Is that you should treat water more as a second, visible layer of atmosphere, instead of a physics object.
(As an idea for lava: It's the exact same thing but burn and destroy anything that touches it)