"1. I have always tried to play around with the camera but haven't found a way to make things look real. For instance in this picture the water seems to be quite close I tried moving the camera back but then the entire scene goes out of prespective are there any particular settings or tricks I can use to make things look more real."

Try changing the scale on the water's material instead of moving the camera.
If you change the scale to 0.5 you'll halve the size of the texture, which will make the water look more distant without having to play with the camera.

I use the camera solely for getting a point-of-view and the requisite "focal length" (just like a real camera). I do any other adjustments by tweaking the scale/orientation of the objects themselves and/or the scale of the assigned texture.

(Of course, that's not the only way to go about it, it's just the one that I find easiest.)

Hope that helps..

Cheers,
Diolma