Tracy asked:
Why did Thales believe that water represents the fundamental question of
our reality? Any arguments for this belief.
Answer by Jürgen Lawrenz
The Greeks believed that the cosmos was infused with life throughout. The kind of material universe we believe in would have seemed very strange to them. So when you examine all life forms on earth, you find that the one thing they all have in common in a reliance on water to sustain them. No water, no life. So water is fundamental.
Thales had no instruments to prove his point. You need to bear this in mind. His claim was a philosophical proposition designed to challenge other thinkers to either agree or come up with a better proposition.
Today, 2600 years later, you can find scientific textbooks informing you that 70% of the contents of the universe is hydrogen.
Not a bad guess, then?
Ask a Philosopher 
That is really good, but what else did he believe