I really depends on what sort of effect you want to go for. If you intend the base to look like deep water then I would avoid sand altogether. For this I would work on the paint job of the base as detailed above, and when it is ready cover it in a thin layer of water effect/PVA. If you were keen on painting the very choppy bits of water as white foam, I would paint this on top of the water effect otherwise it will just look like bubbles under the surface.
If you wanted to go for a shallow water look then the fine sand approach would be the best idea.
Hope it helps,
Rich.
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