Distilled water is not an insulator, but you would never want to build a circuit out of it. Hard (but fresh) water is a weak conductor. Salt water conducts decently, but still nowhere near as well as a wrench.
You won't short out the battery by submerging it. You may cause some corrosion. A truly sealed box is a BAD IDEA because batteries outgas some. The RV stuff Will describes is vented. But it's wild overkill.
For submerging, MUCH bigger risks are the ignition secondaries (spark plug wires, coil(s), and distributor cap if equipped), and especially the air intake.
Water WILL conduct 30 kV very nicely over small gaps. As will air, thin sheets of paper, and so on.