I'm having trouble understanding よりも多くand 多い, Is it literally saying 'more than many needed to use' and 'many energy'?
Your understanding of the first 多く is correct, "more than necessary for (using) the ワザ". The second 多い is indeed tricky, but in this context it obviously means "surplus/excess".
When [it] has more water energy than what is necessary for the ワザ,
Inflicts additional 10 damage per 1 surplus water energy.
You can think ワザに必要なエネルギーよりも is omitted before the second 多い. In other words, this
多い「水」エネルギー is not simple "much energy" but "more-than-necessary-to-use-the-ワザ energy". It can be understood in the context, but 余剰の or 余った would've been more concise.
1 and 2 are apparently different from each other.
However, although the nuance is slightly different between 2 and 3, they are the same when translated into English using "google translation".
I examined here whether "よりも多く" and "より多く" are interchangeable. According to my brief examination I can see that in most cases they are not interchangeable. So what is the difference? I will investigate the difference further in order to explain it clearly. The answer will be made after the survey is over.