How can I reduce the sound of water moving through a pipe?
Acoustic paint - http://www.acousticalsurfaces.com/coat-of-silence/coat-of-silence.html

You will lose very little room and it doesn't take much time.  Read reviews and instructions to make sure which type is best for your walls.

There is also acoustical sheetrock quietrock?  You could strip the wall with 2x4s and put sheetrock over.