Yesterday I left a few comments which, because my computer was "out of sorts" did not stick with GL. (WE had unplugged anything near the computer when out of town for a few days. Tired from the drive, I forgot to look at what usually happens when it is plugged in. The clock had reverted to January, 2001!
A simple fix - if one looks for it. ;)

I wonder if something got dumped into your creek upstream? Could there have been some agricultural waste, more or less accidentally  let into the water? That might account for what seems to be bacterial problems, despite your faithful water changes.

I'm not sure what would clear that up. Perhaps activated carbon - a lot of it in a filter in a holding container before introducing the stuff to the tank would help. Another possibility, especially if there was a detectable bacterial population in the water, would be to dump some hydrogen peroxide into the holding container. In that case I might then drop an active air stone in, after a day, to remove excess oxygen! Probably that latter isn't necessary because hydrogen peroxide, especially in light, is pretty unstable. But this one doesn't know.

More scary, could an herbicide or pesticide have been spread on a field too close to the creek. Now I'm also concerned for you and your family. I seem to recall you have a different source of drinking water, but not sure I would want to wash clothing  or water the garden with such stuff.

Not at all familiar with government agencies in Oz. Heck, I don't know as much as I wish about our own local governments. (Ironically we may know more about national governments, even as provincial or state and local governments often touch our lives the most.)

Is there a water control, conservation, reclamation district you could ask about your water problems or send a sample to? Do you have some sort of environmental protection agency (if it hasn't been emasculated by spending cuts like one country I suspect)? How about a governmental ombudsman you could go to who might be able to steer you to the right people?

I hope I'm wrong about something in the water. In cities around here though, sometimes sudden mystery deaths in consistently cared for aquaria, have been caused by water departments adding a big dose of something all of a sudden.

Most of the time such problems are not on account of the water supply, but when one goes through their usually litany of things to check and nothing seems correct, that might be an avenue to explore. I know of aquarists who have spent a lot of money sending water samples to universities. That's not my suggestion. Check the government agencies.

I wish I had noticed that yesterday's comment hadn't stuck before you went to town. And I could be entirely mistaken anyway.
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As for seahorses, they are neat. The consensus is that they are harder to keep than freshwater guppies. Part of that may be that people try to keep them in too small a tank or put in companions (almost anything) which take their food before they can. Baby brine shrimp may in part meet their needs, though in time even freshwater fish fed only baby b.s. will be malnurished. One photo common in old books shows an aquarist hand feeding a seahorse a baby guppy!

Do buy cultivated seahorses. They are being farmed some now. Since almost all species of seahorses are endangered (officially or just in reality) because of over collecting and habitat destruction, please seek those raised in captivity.

I think that once their marine tank is up and running and they are eating, you would be able to keep them comfortably. And, as you probably know, it is the MALE seahorses which get pregnant. ;)

One of the few companions which might be kept with seahorses are the Mandarin gobies -  really not gobies but "dragonets". Pterosynchiropus splendidus or Synchiropus splendidus or the Mandarin Goby, are also known as Mandarin Dragonet, Mandarin Goby, Green Mandarinfish,                               Stripped Mandarinfish,  Psychedelic fish. These are though are really finicky about what kinds of live foods they consume (or don't) and most of the millions taken annually usually starve in aquaria. They are also quite sensitive to water quality and seem to do best in reef aquaria where the Mysids, amphipods, isopods, benthic copepods), small worms and protozoans produced by the live rock meet their dietary needs.

Actually, you may want to skip the dragonets for now, even though I think they are even more interesting (though a little dumb) compared to the seagorses. Maybe when your reef tank gets mature, depending upon the agressiveness of other fishy residents, they might make sense in there.

I would look up dragonets though to get feeding ideas for seahorses. I don't know that even if they were alone, if seahorses would do well in a reef tank.

I noticed both seahorses and mandarins on a don't keep list, because of the above challenges in keeping them. They also list anemonies because of how all too many of them are starved for food and light in low budget marine set-ups.
http://www.aquarticles.com/articles/saltwater/Gordon&Stuart_Don't_Keep.html

You have probably seen these. I need to look at them more closely:
http://www.aquarticles.com/articles/saltwater/index.html
http://www.masla.com/seahorse.html

One of my favorites was this one on breeding them. Notice how he takes u.g. filters to task.
http://www.aquarticles.com/articles/saltwater/Curran_Rodeo.html