Your question covers alot of turf, about steel, there is not just one steel which you can choose, there are many I will discuss a couple of my favorites. Early kitchen knifes used a simple carbon steel, no additives, holds a good edge, easy to sharpen, but will stain (pretty much no matter what you do) and could rust in not properly cared for.
I like 440c, and 154cm stainless steels for kitchen knives, high chrome prevents staining and rust, keep a good edge (similar to carbon steel) and pretty easy to sharpen.
The more exotic steels contain valadium and other metal additives which will make the edge retention really good, but these are harder to sharpen and have very good stain resistance.
The watermark you reffer to is probably a hamon which is most noticible when you use different steels, I have not done this but I believe something like 5160 as a center steel (will be the edge) and a simple carbon steel (1060) on the outside will give the effect you seek, there are steels that have figured how to fuse stainless to the carbon steel core, giving the best of both worlds