I strongly believe that it happened. It doesn't need to be a "flood of biblical dimensions" but just one terrible enough to convince a few early tribes that it was the end of the world as we know it.
I feel like the myth existing in cultures around the world from Mesopotamia to the Americas gives it credence. It makes sense that a "world-changing event" would work its way into various disparate cultures myths.
Absolutely, water being such a vital part of life pretty much ensures it'll be referenced. Kind of the same thing as various sun gods in cultures around the world.