Will this water level indicator circuit work for my project?
I can see how your circuit can appear to work in a bucket, but it is not well scaleable, nor good for long term use.  There are a number of problems:

The current required thru the water is relatively high.  There is one transistor gain between the water current and that thru the LED, but that's not a lot.  There will be problems with high-resistivity water and long distances.

The high current will cause corrosion more quickly than a low current.

The current is always in the same direction.  This causes assymetric corrosion, which leads to a battery effect.  Depending on details, that battery effect may eventually cause readings to be missed or cause false readings.

There is no thresholding to indicate definite on and definite off.  The LEDs can be partially lit.

There is not even a attempt to limit susceptibility to common mode noise.

You didn't say anything about the 6 V supply being isolated.  That means there can be unintended current paths to elsewhere.  This is a bad idea.



For more details on sensing water resitively see my answer https://electronics.stackexchange.com/a/33938/4512.