I think there should be a Water penalty. It helps add some variety between strengths and weaknesses. One Vampire could possess a generally standard Vampire spell set while another could possess more offensive and powerful magic, but lack the Flight spell to add another weakness to them.
I actually like the Fairy Weakness. In fact, I think one more reason to add the Priestess would be to have yet another enemy that can fight against the Vampire. However I do agree that there should still be a level penalty regardless of how the Vampire is killed. Even with the new set of limitations/nerfing, the Vampire's immortality can still be exploted through use of the Heal Spell. And Heal is already invaluable enough as it is so most Keepers would put priority on having it researched, I imagine.
I would like to have enough weaknesses in order to justify bringing the Vampire's Creature Slot usage to 1 though. It would allow more people to play as Vampires without it cutting back on their RPing ability. The problem with the current set of weaknesses is that they're incredibly situational.
The water weakness obviously doesn't take an effect unless there's water that needs to be crossed, and so far, only one realm has water to the point where the weakness is actually relevant. Fairies and Monks may not always be present, and then there's the case of when a Keeper fights against an enemy Dungeon Keeper. Vampires not being able to resurrect until Level 4 is obviously a very temporary weakness. And of course, there's the Heal Spell abuse.