Maybe things have changed since I went to school, but I'm pretty sure that density affects thermal transfer. Water is a much more efficient medium for heat transfer than air. Thats why engines are water cooled. Apple made water cooled Macs in the PPC days. Water cooled systems are smaller, quieter and more energy efficient than air cooling for a given amount of thermal transfer.
Only one of the G5 PowerMacs utilized liquid cooling (I've had a bunch of those, the air cooled ones as well). The reason is, they couldn't get enough air through the case to cool the CPU without using louder fans (spin them higher). The reason for this is that Apple always designed their systems with form over function in mind. They did the same with a trashcan-MacPro and ran into thermal problems.
What people usually don't do is check how much heat their source is generating and buy a properly specced cooling solution. They just slap something onto it and hope it works. The next step is to crank up the fans, because the heat sink doesn't have enough surface area. So why not start there and buy a large enough air cooling system? Instead of comparing a stock cooler to a 3x120 radiator which makes no sense at all. Funny that people never compare a top air-cooler to a single 120 radiator. Speaking of comparing apples to oranges.
You can also use a 3'x3'x1' custom radiator and passively cool a Intel/AMD/GPU desktop system. If such a heat-sink would exists and you could actually mount it somehow, you could do the same. Obviously these need to be placed outside the case where liquid cooling comes in handy.
I'm running a liquid cooling system in my non-Mac home office setup. The reason is not that air-cooling wouldn't work, the reason is the back of the case is placed close to a wall. That doesn't allow to suck cool air in on the front (it's a mesh case) and blow it out the back. I'd actually have to redirect the airflow to the top and blow it out there (I'm talking about the majority here, as some air will always go out top). So moving the air in through the front and blow it out on top, makes a liquid cooling the better choice in this case. If the case is placed further away from a wall, air-cooling works just as well.
If anyone would like to play around with this, plenty of software systems exist that allow full simulation. Matlab has a very simple introduction ignoring many aspects, but it's a good place to start:
https://www.mathworks.com/help/physmod/hydro/ug/simple-cpu-cooling-system.html
You're absolutely right, a well designed water cooled device is quiter and has better cooling than pure air. I've even seen very large machines that were water (and antifreeze mix) cooled, you really can't get better unless you go with something like freon. (gas/heat exchange)
You're never cooling with pure air. You always have some form of base attached to a heat plate moving the heat to the sink and then cool the surface area. Same is true for liquid cooling, you're moving the air away from a source to a radiator and use air there. Depending on the quality of your air-cooler the heat pipes transferring the heat from the base to the sink are filled with liquid or gas, the rest is a function of surface area of the sink and airflow.
I used to own a PowerMac G5 with dual PowerPC processors that had a liquid cooling system (PowerMac G5 2.7Ghz dual processor). Right from Apple's factory. It was quieter than the lower-powered models with traditional air cooling.
See above.