Use common sense with dealing with cash and valuables. No problem if you use common sense. There was a bloodless coup in '87 followed by a more serious coup in May of 2000. Fiji is now stable. The local water is generally good at hotels and in cities, but be careful in villages.
Bottled water is available.
Yes, and by the way it's customary to drink it in one swallow. It won't kill you and you'll also be showing respect to your hosts. Fijians love a good time. Be careful though, there are a lot of STDs.