The problem with doing it in Photoshop is that you can have it set up so that your water features are on top of background land features (e.g parks that extend into the water and include some islands, for instance). What happens is that the water ends up covering anything below it. There are work arounds, of course, but you need to ensure that you resulting water image is on the bottom.
I don't get what you mean - I export the land polys to photoshop (everything else is water/sea) and then create the glow from there - save it as a psd and bring it in as a background layer in Illy. One could do it as a semi-transparent feathered thing, or color all the water/background in PS. Other things goes on top, labels, parks, islands, etc.