Answering your last question first, water is vital to flush away the fat once the body has converted what it wants to energy. Part of this process involves filling up the fat cells molecule by molecule as the fat molecules are burnt, and then when that fat cell has no more fat, the ‘whoosh’ effect is where the cell collapses completely, removing the fat residue. Dehydration also tends to be a cause of water retention, somewhat counter intuitively, as the body will be reluctant to lose what it has. Regarding the ‘sweet tooth’ this is something that only time can address. Being totally sugar free is impractical, even some vegetables have sugars in, but if you can replace your sweet treats with berries or very dark chocolate, you will find that you may make the switch that I have where I now find many things I used to enjoy too sweet. Sweeteners should be avoided as well, although Stevia may be okay if you use this, as it causes blood sugar spikes and weight gain.
Regarding being ill and putting on weight on 800 calories. It is likely to be water weight, unless too much of the sweet stuff has been creeping in. For what it’s worth, I always try to eat normally when I am ill, even if I lose my appetite, so I think you did the right thing, and when you get up and active again the weight gain should resolve itself.