I remember that darn flashing being a nasty bug. Greaty reduced by some mods. The shakey water like we have here, yes I get it. But not all the time. Toying with TC helps if I recall. I had thought the camera moving reduced or increased this happening. You are right though, forget about it or you will focus all your time attempting to fix it or playing only to sit there looking at this water shake!
SH4 is a great game. The mods make it so much better. What SH4 could have been if the developers had 6 more months with it!