simply encoding a much more complicated process into the simplest possible language,
This is the issue though... they're over simplifying it, and I get that. I wouldn't expect the PADI OW manual to go into a discussion about the speed of sound being due actually because of the ratio of the compressibility to the density or being the derivative of pressure with respect to density over density, etc. Simplifying it makes sense.
The issue is that in doing that simplification, the implication is that there is a direct proportional relationship between density and speed of sound. If density increases, speed of sound increases. That's just not true. While things that are denser tend to have a faster speed of sound, the density itself is an inversely proportional term. There are other factors that drive up the speed of sound, and while there is a correlation to increased density, it isn't a causation. Yes, liquid water is much denser than air. Yes, the speed of sound is faster in water. You could probably even go as far as saying that water is denser than air for the same molecular reasons that the speed of sound is faster, but that's still not the same thing as saying the speed of sound is faster
because it is denser.
A much less wrong simplification would be to say that the speed of sound is faster because water is less compressible. That, in itself, doesn't tell the whole story either, but at least it's pointing in the right direction.
It goes back to the earlier statement about claiming something larger floats because it is heavier than something smaller.
Now, obviously, we're being pedantic about this far beyond a level that's needed on a typical PADI test, but that's what makes these quiz questions in this format more interesting. There's the test answer and there's the right answer and often they're not the same.