What is an appropriate water to yeast ratio for hydrating yeast for bagels?
You're missing a step. You have to let them proof after forming them into rings. Just like how for bread making you always have to double proof, or else it'll be like pizza or pita dough.

After that they should be fine, just take care not to handle them too aggressively while moving to and from the boiling water (Again, just like bread. You deflate the first proofing intentionally but after the second proofing you have to maintain the air bubbles that make up your crumb)