A lake, small in width as a waterbody (7)

'a waterbody' is the definition.
I know nothing about this answer so I cannot judge whether it can be defined by this definition.

'a lake small in width' is the wordplay.
'lake' becomes 'l'.
'small' becomes 's' (abbreviation - e.g. clothes size).
'in' is an insertion indicator.
'width' becomes 'area' (both can mean an expanse or range).
'a'+'l'+'s'='als'
'als' placed within 'area' is 'ARALSEA'.

'as' acts as a link.