Even if your ticket was purchased at a discount, you will only pay the cost of the upgrade, which to add the Water Park Fun & More is $50.00 plus tax per ticket. Your ticket does not have to have already been used once. Either way, Disney will see that your ticket was purchased at a discount (if that is the case) and will absorb the extra cost. You are not penalized for buying tickets at a discount.
As far as where to do this, I would visit your resort's lobby concierge. The lines are often relatively short (at least compared to the parks) and they do this type of thing on a daily basis. Just remember, anything you don't use (park days, water park and fun visits) will expire 14 days from your first use unless you add the no expiration option.