Why are circuit boards not covered in thermal paste?
PC boards are designed with traces wide (and thick) enough so that they DO NOT dissipate any significant amount of power.  Therefore they do not require heat sinking, by water (or any other liquid) immersion, nor by mechanical heat sinking. A PC board that heats up under normal use would be poorly designed by definition.

Thermal paste DOES NOT dissipate heat. It is only a medium of contact exchange between the heat-generating object (typically a semiconductor or resistor) and the heat sinking device (an air-cooled heat sink or liquid-cooled heat exchanger).

For those reasons you don't see PC boards covered in thermal paste.