Yeah it seems like the 2 attacks are the same here but they really are different:
Water Level 1 shoots a 3 tiles-wide wave that travels forward and pierces through enemies, meaning that each target can only suffer one hit from it. (Its actually the equivalent of Water Level 2 in the original NES game).
Fire Level 3 is quite different: The center flame burns on the spot for a short time, meaning that an enemy located on that same spot can suffer many hits during that time. And the two other flames rotate around the center one for a short time also, damaging every enemy located on their path. These 3 flames do not travel forward (notice the absence of an arrow tip on the red line). They rather appear a few steps in front of the player and remain there burning. Fire Level 3 is potentially the most damaging of these 12 charged attacks.
By the way I won't spoil the 5th sword's charged attacks for now. ^^
Thanks for the comments.