Warning, everything here is a spoiler.
The third season of H2O - Just Add Water was very different from the first two in many ways. The obvious one is that there were major changes in the cast. There were also major changes in the way the show was written.
The first season presented the girls as women with super powers who also happened to change into mermaids when wet. They used their powers regularly, often in trivial ways. In several episodes they were not even shown as mermaids. The second season split between the two. They still used their powers but they were shown as mermaids in every episode.
The third season was the opposite of the first season. Every episode had the girls as mermaids but they only used their powers occasionally.
Continuity was handled differently. In the first season there was a lot of background continuity. This involved things that were easily picked up by the audience like Zane seeing a mermaid tail. Except for the season finale, major plots were not carried over from one episode to the next. The second season had some story arcs that spanned multiple episodes but there were still many stand-alone episodes.
By the third season, continued story arcs were the rule rather than the exception. The season almost feels like chapters in a novel where the first season was a series of stories about a set of characters. The episodes are also much more serious. There is only one out and out comedy episode involving a floating bubble of water with a fish in it. Strangely this was shown out of sequence and continuity is so tight that this is painfully obvious.
There were two major story arcs. The first was about a tendril of water that formed in the moon pool during the full moon. It is featured in all five full moon episodes and is part of the A or B plot in most other episodes.
The second story arc is the romance between the new mermaid Bella and Will, a free diver (someone who competes to see how deep he can dive). It takes the entire season before they actually get together and the romance is handled very realistically. Bella was interested in Will from the beginning but it took him a while to reciprocate. After learning that she was a mermaid he became so excited with that side of her that she broke off the relationship for a while. There was also some question about which mermaid Will was interested in after Rikki saved his life. This was a great contrast to Emma's "I hate you, let's date" relationship in the second season.
Rikki and Zane's relationship evolved and eventually fell apart. Zane reopened the juice bar, naming it after Rikki and having her managing it. It was obvious that she did all the work while he played. As always, Zane managed to screw up their relationship then tried to fix things after they broke up.
Apparently Zane really needed Rikki's management. After she left he was regularly shown actually working at his desk instead of playing. Even with that, the bar was on the verge of closing within a few weeks of Rikki's departure.
Rikki as a character grew the most during the show's run. By the third season, she was the most mature character in the cast (although she still blew off studying and was skeptical of science). All of this was consistent with her character.
After being the center of the second season, Cleo got little attention in the third season. She still fought with her sister. Her divorsed father met someone new and got married. Lewis left for America and Cleo took over his role as chief scientist for the group.
All told, the season was better-written and more realistic that the first two. There were few cringe-worthy moments or relationships played just for laughs.