I like grafikeer's approach but if you would rather continure on the path you are taking, a couple suggestions might help.

Use soft edges on your spotlight (click the little "E" when you have a light selected to get into the light edited screen) but beware this lengthens render time tremendously.

Increase the bump frequency of your water mat.

To make the clouds using spheres, make very large spheres and play with the "base density" slider in the material lab.

Special note: avoid overlapping cloud spheres with each other or other objects.  It can cause some ugly artifacts.