The time period, realism and historical accuracy was the main reason for support the game.
I know that the picture above was published only to demonstrate the UI. That looks good, but when I see how close the people are settled next to water it does not make sense to me – unless they (or the player I suppose) was planning to trigger some disease or love mosquito’s.
The blur too is way too strong. I hope it can be turned of.
There are actually real examples from Neolithic settlements built right near the water in real life.
There are examples built over the water also, with elevated houses, even in swampy areas.
Provided the number of examples that have been found we can assume it was not very uncommon when the water was near a settlement.
In any case is up to the player to place the buildings, so players can choose were they fit better for them.
Of course as long as we introduce mechanics related to placements and surroundings effects best choices for each building may change.
The blur is another case of “But… but it looks cool for the screenshot!” 
This one is taken with deep of field effect configured at its maximum.
Of course it can be tuned down or completely disabled.
Let’s think about the stilt houses on Lake Constance.
For one thing, water and food were abundant and protected against snakes, wolves, bears and other animals. Disadvantage sure mosquitoes …
I would say old good smoke can solve that.
Stilt houses are a great idea, for sure!
Also, not sure how many mosquitoes exist in Northern Europe.
Finland (where I live) is also called land of million mosquitoes because in summer there’s mosquitoes everywhere. And very much of them.
Yup, there’s many in Northern Europe. Marshy/wet areas + summer = baaad 
Guess, you think of malaria, this danger is really very low. They are more like gnat/midge (“Schnaken” in german), annoying and unpleasant.
Well, show’s what I know lol
In all of my research, I never looked into mosquitoes \o/
well with no one using right guard…the smell alone keeps the 'quitoes away
We might want to consider the constraints of time and distance. While in real life you could walk an hour or two to the river to fish, I don’t really want my villager to do the same in the game. So while it might be more realistic to implement the health risks of close water bodies, we should also do this with a drastically reduced effect zone. Well, balance is key as usual 
Mostly you do not think that the “danger” of a settlement in or beside the water is rather low? Almost all city foundations and villages were in close proximity to rivers, lakes or streams. If it had been so dangerous, you would have had the choice to avoid water. Obviously, that was not the case and the benefits outweighed it.
well you can see the ״Nile” as an example of how people used to live(and why choosing living next to water)
Living next to water is highly advantageous. If you haven’t invented crop rotation yet, yearly flooding can be beneficial to fertilizing the land. Water also provides fresh fish, shellfish, reeds and other such materials, as well as attracting game to hunt. Clay is also abundant near the water and used in so many different Neolithic things. In short, water is always desirable.
