How does water make Winter warmer?

By being changed into ice and snow.

When water is changed into ice or snow, what takes place?

The latent heat in the water is given off, and thus the winter air is made warmer.

Can water be compressed into a smaller bulk?

Yes; it can be compressed, but not so much as air.

What is said of water that is compressed?

Its particles are pressed closer together, and it is said to be more dense.

Why is the water at the bottom of a pond more dense than that at the surface?

Because the water at the bottom of the pond has to bear the weight of all the water above it.