The faint outline of the last rib for an adult IS the correct weight for a show dog. I am fairly experienced at showing and recommend that ALL dogs, show quality or not, be kept as "show weight". As for your pup, he's very cute and please don't panic because we think he's too thin, he isn't horribly thin, just a little and adding a little extra food will help him plump up a little so the next growth spurt won't put him back to being too thin.
As for water on the food, you will find that there are many different schools of thought on to water kibble down or not. Pick what works best for your dog and go with that. :-)
You might want to gradually increase his food intake over a few days, otherwise you could wind up dealing with soft stools.
Pam