Mister Fantastic vs. Hydro-Man

Can Hydroman access the unlimited potential of the primordial waters that life springs from and defeat the smartest man on earth?

yes

In a featureless environment maybe. In a city setting, most likely not. Reed would find something and turn him into a freezie.

Nah. Reed builds an electrolysis cell on-the-fly, turning Hydro-Man into gaseous hydrogen and oxygen:

4 H2O --> 4 H2 + 2 O2

Reed then considers the green values and uses the produced hydrogen to reduce some of the atmospheric carbon dioxide into methane in a Sabatier reaction:

If you look at the coefficients, you can see that the net process destroys one half of the water content of Hydro-Man's body, leaving in its place a cloud of methane (and oxygen) gas. If Morrie still won't yield Reed can repeat the process again until he does... or nothing remains of him. As a final insult to Morrie, soon afterwards Reed receives a prize for fighting the greenhouse effect.

I should note that methane, too, is a greenhouse gas but Reed would of course collect it for later use in his green lab which doesn't produce greenhouse gas emissions.

Why would he win a prize?

Hydrogen production from electrolysis is already a thing. What would make it prize worthy is if he could do it cheaply - the energy requirements mean that unless you have large amounts of renewables backing it up, the LCOH is still quite high.

Yes, true... but in this case the prize would be awarded by some environmental organization; it wouldn't be a prize for a scientific achievement a la the Nobel Prize.

"For his work in promoting the fight against the climate change while exterminating super-criminals."

If Hydro-Man abbrevriates his power and increases his depth he could effectivly become a chinese water tourture.
He'd break them all.