You are right about the viscosity and density making water have more resistance then air. However the water surface is much worse. The surface tension cause a lot of the resistance when traveling through it. In addition to this a surface ship can only displace water to the sides and down, while a submarine can also displace the water upwards. So you get less bow pressure as the water can more easily move out of the way. And these two factors offsets the disadvantages of traveling through a denser and more viscous medium.
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