Pub submerged in the river could be more watery (7)
I believe the answer is:
thinner
'be more watery' is the definition.
('thin' can be similar in meaning to 'watery')
'pub submerged in the river' is the wordplay.
'pub' becomes 'inn' (an inn is a type of pub).
'submerged in' indicates putting letters inside (I've seen this in other clues).
'river' becomes 'r' (abbreviation for river).
'inn' placed inside 'the' is 'thinne'.
'thinne'+'r'='THINNER'
'could' is the link.
(Other definitions for thinner that I've seen before include "Slenderer" , "Slimmer" , "Dissoving agent" , "Diluting solvent" , "More slim" .)