Capacitive fluid level sensor design and insulation
There is no electrical reason to add a gap from water to any electrode except for rust. Any extra plastic (4) or air (1) gap reduces sensitivity.   But then so does rust or lime or calcium buildup if it insulates the metal at some significant thickness .

Perhaps pouring inside a rust-proofing paint and turning it to coat the interior metal surfaces and curing hard may slow down the rust a bit.  Then pour out the excess .  Might be messy.  

The capacitance will be proportional to the mutual  surface area of two electrodes and the gap should be smaller for low impedance (~50 ohms). 

The interior pipe or rod needs to be coated as well as possible for the same reason and centred such as an anodized aluminum pole.

Then use a Schmitt Inverter as a Relaxation Oscillator to measure the height of water by pulse interval time 1/f . You could even slow it down with some CD4040 counter and LED.