Bali is one of the world's most popular and famous tropical islands, and it's responsibility for most of Indonesia's tourism. There's a fair amount of confusion about whether there are any water villas or overwater bungalows on Bali, partly because the resort that claims to have invented and built the first-ever overwater bungalows is called Club Bali Hai.
Unfortunately, that resort is on the island of Moorea, just off Tahiti, in the South Pacific, thousands of kilometers from Indonesia. Bali and its active tides just aren't the right kind of island for rooms on stilts, so it's unlikely that they'll be coming anytime soon. Bali has dozens of 5-star beach resorts, but it doesn't have any shallow lagoons so even if they did build water villas off the shore, they'd be above the noisy waves going in and out.
But the good news is that there is an amazing assortment of water villas near Bali, relatively speaking. With the exception of a few overwater bungalow resorts in the Caribbean, virtually all of the world's water villas are in the tropics between the South Pacific, and the Maldives, which is just southwest of India.