I want that light blue bag.
Tofugu T-shirt is breezy sky blue.
Why is the sky light blue today?
You'd think that water color would have something to do with watercolors, but it doesn't. No, it has to do with the color of water, which, ironically, is sky blue in English. Light blue works as well.
The reading for this word consists of the kun'yomi reading of 水 and the kun'yomi reading of 色. For 水 you'll know this reading via your vocab studies. For 色 it just so happens to be the reading you learned with the kanji.