Work out, even if you are hungover.
This is the truth: I normally have some difficulty in sleeping. It gets a much bigger problem when I use gear.
Then, alcohol helps. I know that alcohol may help you to go to sleep, but it disturbs the sleep pattern and you would have disturbed sleep.
But answering your question: water does not help. Alcohol makes you pee, and makes you dehydrated. Drinking water would help there, but not with hangover.
If you are hungover, do workout, it would definitely make you feel better.
I had no problem in bulking just because of alcohol. I don't think it had much effect in muscle tissue.
Again, I am not saying that you should drink, I am just answering your question.