2002 530i filling radiator often radiator leak

Hello & Thanks in advance for you advice! I admit I am not very knowledgeable re cars. My check coolant light started coming on a few weeks ago on my '02 530i with about 87K miles on my well maintained BMW. Coolant level appeared low, so I called my regular mechanic and he advised filling with regular water, within about 6 inches to the top, since I did not have special BMW coolant to put in. I drove the hour to take the car to him, watching the temperature gauge carefully. He checked the car over and put it on the lift. He pressure tested and No leak found. He did show me where some connecting hoses underneath where beginning to "swell" near their connections & said those wearing hoses would eventually need to be replaced. He checked the block and found a very slight color change to the test fluid, which he said could mean that I eventually may need to replace the head gasket. He put ceramic sealer in the radiator, to see if that would correct the problem. At this point, I keep checking the radiator level before every drive, and have to fill with water from no water needed or up to 1.75 of the small bottles of water. Temperature gauge has always remained at 12 O'clock. There are faint dry white stains that seem to emanate from the radiator cap area and onto the fan and engine. Questions: Should I really be topping off with regular water? What is causing the problem? Should I just continue to top off with regular water or other, and watch the temperature gauge, and carry water with me, and see if the problem goes away? All advice is appreciated, even if you advise me it might be time to sell or trade my Beemer in....