I used to do this with students to help get the idea of f=ma across…never tried wings though. We took some video using a camera with a slow motion facility and the observation was that all the water has been expelled by the time that the bottle has done 5 metres or so. We pumped them up to 100psi and never had a bottle failure. We got plenty of cold showers! I presume there is an optimum ratio of air and water in the bottle. More water and less air would give thrust for longer, but the pressure will fall off as the air expands.
FAI free flight power models used to use high wing, on a sort of pylon, to help with the trim changes associated with the enormous change in speed and attitude between climb and glide. It's not just the CoG shifting, under power the plane is going much faster, so there will be more lift, and since the climb is nearly vertical, the lift is not in a direction you want. (A typical FAI power model used to be able to climb vertically to about 100 metres with a 6 second engine run, then glide for nearly three minutes from that height.) You don't necessarily need to fold the wings away provided you can control the trim.
On the other hand, how complicated are you allowed to get? Instead of using water for reaction mass, just have the bottle full of air and use it to run a small motor like the CO2 motors that used to be used for model planes. That should give you a pretty long flight time, well into minutes of duration. Should be able to cover a bit of ground in that time.
John