That’s correct. That kind of conscious sedation (similar to what one might experience during colonoscopy, though I don’t know about the underwater variety), tends to produce anterograde amnesia, which means that you’re technically “awake” and can respond to some degree, but you don’t really form memories of what happens while you’re under the influence of the medication. It’s a helpful state to put someone in under certain clinical conditions because it reduces anxiety (and potential combativeness, if that’s an issue); unfortunately, that effect has been abused by some people in the past (such as with flunitrazepam, which isn’t the drug’s fault; it’s the user), so it’s important to have trusted care and supervision in such a state.
It should bounce back pretty quickly, especially if that’s the “good” eye and you have an uncomplicated procedure. You might be surprised. 
At least your vision’s good enough to appreciate that! 
Not all, at least not as I understand it (and I’m not an ophthalmologist). I’m aware of laser-assisted cataract surgery, but that still involves phacoemulsification and a lens implant like the traditional surgery.