Eliminate incorrect options: (1) 'Its high density compared to other liquids' is incorrect because water is not particularly dense compared to other liquids, and this property is not central to its biological importance. (2) 'Its inability to form solutions with ionic compounds' is incorrect because water is excellent at dissolving ionic compounds due to its polarity. (3) 'Its lack of hydrogen bonding' is incorrect because water does exhibit hydrogen bonding, which is crucial for many of its properties, such as high specific heat and surface tension.