You mean like those old pixel sand simulations and noita? I use a different method. It works by splitting a level into a set of pillars that hold amounts of liquid and calculate flow to its neighbors. It lacks some aspects like proper vertical flows, but it's fast and easier to render.
In the tutorial you need to be at the top of the vertical shaft (if you hover from the ground you should have just enough height) and then quickly hold down + shoot up. I'll try to give it more space.