I don't have much experience with animating so I'll leave that for others to comment on, but the biggest problem I can see myself is that water is not flowing downwards physically correct. There are some places right under the rocks that it would simply not reach. Here's a quick display of what I mean:
Not perfect, just to illustrate the idea. It's OK if some of the trails 'snake' their way down along the face of the cliff, but the majority of what conveys a waterfall are the vertical drops of water that simply go straight down until they hit something. It can widen as it goes from top to bottom, but this is by trading depth for width. That means it thins out into a spray, so it won't be a very solid flow (you'd need to darken or dither it out or animate alternating sprays).
