OK, I figured it out. I noticed with r.Water.SingleLayer.DepthPrepass=1 while the shadows were still blocky, the blocks would get smaller when you zoom into them. So in searching for other settings I found r.Water.SingleLayer.ShadersSupportVSMFiltering and r.Water.SingleLayer.VSMFiltering.
Adding all 3 the DefaultEngine.ini like so:
r.Water.SingleLayer.DepthPrepass=1
r.Water.SingleLayer.ShadersSupportVSMFiltering=1
r.Water.SingleLayer.VSMFiltering=1
Gives you nice soft virtual shadows on water:
Thanks for the help with this!