Perhaps it is not OP. Perhaps the dragon just needs more resistance.  Because it sounds just way easy as you say.  The spell itself may be okay, cause I tend to view water as a whole as underwhelming.  (like most everything compared to fire / death ) I know that's my opinion.  Anyways.

With some tweaking on dragons resistances.  Perhaps other monsters will need it too.   You should have some kind of chance, but at the levels you describe you should be seeing "resisted" more than you see success.  That's my opinion.  I don't have problems with the spell or way it works.

The single monster kiting issue looks temporary to me. I think Frogboy implemented some grand changes and is probably now working on which situations need an exception. All large single unit monsters are currently moving at one space per turn, trying to get first strike. They should be moving at their max so that kiting is less possible. Good thing to bring this up though. I personally would like to see most dragonkind get at least +5 Initiative to help balnce them out.

I think the dragon needs to be able to resist it.  It's just silly to me that a level 4 Sovereign could affect a level 13 dragon.  In fact, the sov or champ should have to be of greater level to have a chance at the spell affecting the dragon.  Only by say stacking certain items or taking things that give spell mastery on level up could make it so the caster could be even level or slightly lower.