The necessity of a filter may depend on where you fly from and where  you expect to fly. Occasionally there are swarms of insects that we fly through (at least in my part of the country) which will be ingested. those little exoskeletons are quite abrasive.

 

Mooney in their old "Super 21s"  had a flap which allowed one to select ram air at cruise.

 

In a carb, when operating on carb heat, the air is unfiltered.

 

Rich

 

> 2. I take it that filtering is essential. How does water effect filter material? What filter material is best.

On a car, a must.  On an airplane, just be careful where you put inlet ( keep it high) and don't taxi behind someone on a dry dusty taxiway.   Never had an air filter.