Creatine dehydrates the body, so you have to drink plenty of water with it. They say that if you take caffeine, creatine will not work. That has never been proven. But caffeine dehydrates the body too. That is water weight.
Creatine helps to hold water in the muscles.
Creatine will not make you look fat or puffy. Basically it helps the body replace needed energy during your workout. That is how it works. Creatine is best taken with a fruit juice. The reason for that is that the carbs in the juice help to store the creatine in the muscle.