Yes. Water aerobics is a good overall exercise. The water creates resistance, which makes you work harder, improving your heart and lung function.
Yes. Water based exercise can improve your fitness level and do it without joint stress. This is especially good if you are just starting out or have joint problems. You can get aerobic benefit, strength benefit and other benefits. You won't get imporvement in bone strength. You need gravity based exercise for that. Otherwise go fo it!