This guide is a video of me, doing Watery over and over again with controller input displayed. I try not to finish the level so I can reset with new pieces for demo purposes, but you can see how it would be finished.

The key is to press Up to do the sonic drop, and then holding both up and left to get the piece to slide down the steps, but not all pieces can fit.

First Piece, you need a Blue T or a Orange L to cascade, or straight line horizontal. Second Piece, you need a Blue T, Blue L or Green Z. This fits into the final spot at the bottom. Clearing the whole bottom line.

Any Red Straight, clears the top line horizontal, and can be used to complete the final line if the top is already cleared.