Hmmm... It might work both ways... If it works the way you describe (wake up see nobody, stop crying) that is the best.... But it could also work the other way: wake up see nobody, scared, start to cry.
It's never too late to start training her to sleep on her own. Just that sometimes when they cry coz they're scared, quite heart pain. There're night vision baby monitors out in the market so you can still see your baby but your baby can't see you. I've not tried one of those. My baby monitor only transmit sound.
Maybe you can do up her room for her? Let her play in the room and nap in the room... Then hopefully it'll be easier to transition her to sleep on her own at night.
Good that your baby likes plain water.. Sigh.. Mine I've been struggling feeding him water since 8 mths... Now he has learnt how to spray the water into my face... Zzzz...