Unless you are using a totally enclosed fan cooled motor......you had better keep the water away from the "electric" motor! Now on the other had there are servo motors that are designed to run in a wet environment that you might could use as your spindle motor. As far as holding the f/g under the water you will need to build a fixture to elevate the f/g off the bottom of the pool and use something else to to keep it weighted down.
Why don't you just use a good dust collection system? People cut these materials every day with a collection system. There are several type of filters that will trap down in the micron sizes.
Mike
No greater love can a man have than this, that he give his life for a friend.