How does water density affect life?

Density of ice is less than the density of water. Therefore lakes freeze top down in the winter.
Ice floats because it is less dense than water. Therefore, during the cold season, a layer of ice will form on the surface of ponds and lakes, creating an insulation for the aquatic lives underneath. However, for most substances, the density of the solid state is usually larger than that of the liquid state. If this was the case for water, the ice formed at the surface of the water (in contact with the cold air above) will sink. The process will repeat and soon the whole lake will freeze, killing all the animals and plants living in the water body.