I have to tell you
darza:, you have asked a very complicated, multi-part question. It will be a lot of work for us to answer all parts. And our forum rules still apply, you have to do most of the work.
It was found that, The higher the concentration of water in the fermentation process, the more pure the ethanol produced is, however the less the yield is.
I would like to know how you found this out. Can you support this statement in some way?
Yeast is the machine that converts the sugar into ethanol.
No, it is not. That might be a useful model for this particular case, but you should describe it as a model or an analogy, if you mean it that way. That would be more typing for you, but it makes your answers more correct.
it effects how fast the fermentation goes.
That is, likewise, not correct. Well, somewhat correct, but only pertinent for some situations. You should write complete thoughts, if you're going to be so abstract.
Yeast will go to sleep when it gets too cold and either just shut down or die if it gets too hot.
This is correct. But not pertinent, did you not notice? You mention you need temperature information, but you had this information, couldn't you have left this part out and done it your self? Or maybe ask it later on this forum, as a separate question.
Your questions are very broad, and diverse. You appear to have started a large project, but your questions are all over the place. Could this be for a project styled after UK O-levels or A-levels? If its something like that, you're expected to write up the large project yourself, and you'll have to be coherent in pulling the diverse concepts together.
We've worked with students on very complicated problems before. And if they don't work with us to keep the questions and answer straight, things go pear-shaped rapidly. This is an example of one such thread:
http://www.chemicalforums.com/index.php?topic=24068.0