Minecraft Style World

The best way to show my problem is through a video. Reason I have to make a video is I have difficulty explaining my problem with text, I’ve tried like 10 times.
World Video

After you watched the video here is the questions I want to ask because I didnt sum it up in the video:
How do I generate stone repeatedly to a certain distance that ends with being a flat plane?
How can I make it where water fills in everything under the initial top layer of water?
How can I add water physics?(not the main question, only if you can answer it)

If you need me to clarify on anything please ask. Thanks for the help!