The machines don't actually work whilst the airship is in motion, but they preserve their charge and inventories until you reconnect it to the grid.
And yeah, Pistons should work fine, the main challenge is in getting them suspended in water, as normally you'd have to pillar up to where you want to place the generator, place it, dig out from under it and connect it all together with wiring. Repeat that for as many HG's as you need, this allows you to do it en masse.
Consider me thoroughly confused... When I played with watermills, I built the mills and used a bucket over the top of them to run water over them. I don't see why it's harder to build the mills and surround them with water. You could also just swim under the water and place the mill on the wire if you didn't want to move the water. I think it'd be more of a bitch to build a complex flying structure and manually sink it in water. It's not like Minecraft water is DF water where a little mistake could flood your world.
IMO, having to build a pillar up from the bottom of the ocean to place the watermill on and then build a long pillar outwards to place many more on is more annoying than simply being able to sink several dozen of them down in a few seconds.
And anyway, where's the fun in simplicity? Building an airship and sinking enough hydro generators to provide hundreds of times more power than I need is a lot more fun than just efficiency and utility.