Could fluoride in drinking water prevent tooth decay?

Of course. "Since 1950, the ADA has unreservedly endorsed the fluoridation of community water supplies as safe, effective, and necessary in preventing tooth decay."
Public fluoridation. It can't necessarily guarantee it, but it could certainly make your teeth stronger and less likely to develop caries (tooth decay). This along with proper tooth brushing, flossing and a diet that does not promote tooth decay will all aid in preventing tooth decay and a healthy mouth.
Yes. Plenty of studies and literature on this. One of the most positive things to happen in the last 60 years for the prevention of tooth decay.
Absolutely ! Together with eating healthy and proper oral hygiene, as well as regular visits to your dentist. Every little bit helps !