The primary advantage of being in the water is the buoyancy. It takes most of the compression forces of gravity off of the joints and allows exercise without the pain and load on your body that you feel when exercising on land. The other benefit is that the water creates resistance, so you are able to build strength just by walking through it and/or moving your arms and legs through it.
Anybody can benefit from aquatic therapy, but people who benefit the most are those with arthritis and/or other joint problems that cause too much pain with exercise on land or in the gym with typical equipment used for strengthening. Other populations who benefit from aquatics are those who had surgery and are not allowed to put full weight on a leg for a period of time. In the water, you can practice normal walking with less than half your body weight on your limb. This allows you to start practicing activity that you are medically restricted from doing on land for a period of time.