Another thing I didn't discover until going through the game later is that in the Waterloo World level, Raz can walk in the water (sort of) without being grabbed by the Water Curse.
When Raz is at his smallest (where he can interact with the peasants and grab figments, etc), the "world" he is in is actually a game board. This means the water has seams to it just like the grassy land does. Raz can walk on these seams in the water without the curse grabbing him because the water is too shallow. It's a fine line though. If he wanders too far off of the seam (goes into the water too deeply), he'll get grabbed.
Walking on the water seams makes it a lot easier to get around in the gameboard portion of the level.