Does watering the crops actually do anything benificial other than make your villager a better farmer? Does it say shorten the waiting time on crops, give more food.. anything?

Also, is it my imagination or does the time it takes between crops get longer and longer each time?

Watering the crops does nothing but train your villagers in farming.

The time between crops does change. I suspect that the faster you harvest a crop, the longer it takes to grow back. I only have one person farming a crop until I learn a better way.

The crop cycle is constant - but if you harvest faster during one cycle, you obviously have to wait longer for the next cycle to start