You can't display visible bullets as such in FPSC, but you might want to look at the 'flak' weapons, particularly the bazooka. You might be able to increase the rate of fire until you get the illusion of a constant stream of shells, which you could then replace with a water flow.
As for actually putting out the fire, I suppose you could make the fire into an entity, give it a health rating and then 'kill' it with the water.
However, this is pure speculation on my part. Hopefully more knowledgeable members will be able to offer better advice. In principle though, I think it might be possible - not easy, but possible.
Cheers
- Graham