Why is it necessary to add hydrogen and delete water before protein-ligand docking? What is the reason for adding hydrogen and removing unnecessary water molecules from the protein structure before protein-ligand docking? FYI, the tools I used for docking is GOLD.
My answer is mainly based on molecular dynamics,but in this context it shouldn't make much of a difference.

The main reason has to do with the force-field-water model used during the simulation. Examples of water models are SPC, TIP3P or TIP4P; same molecule (water) but different topology.

A pdb usually comes from different sources and it can contain molecules that are not standard and therefore not recognised by the model of your simulation. Usually, once the structure is loaded, your system is re-built so that it conforms to the model topology. There are exception though, for example if your water is part of a functional active site. In that case you can keep it, but its structures (topology of the water molecule) has to be recognised by the model.

Hydrogens are usually added to "saturate" and stabilise the bonds.