If it's a matter of a specific rail being overloaded and going out of voltage spec, it could happen with one card as well as two, simply because it's the one card doing it.
If you've got sufficient ventilation, then the temperature is likely only sufficient in that you will be at max power consumption at that point, with the fan spinning as fast as it's allowed to maintain that temperature.
The PSU you're getting as a replacement is a big improvement, distribution-wise, but still has two rails. Given the size of the second rail, however, it's almost certain to be the one with PCIe connectors on it, so you should be fine. In the future, though, stick with single rails.
As for the temperature in general, the 290X cards are designed to let the card reach the defined maximum temperature (which defaults to 95C), then use only as much fan as necessary to maintain it. Then, if the fan is at the max allowable speed (40% by default) but temperature still wants to go up, it will reduce clock speeds. So an air-cooled 290X will pretty much always be at 95C when in a game.
If you live in the US, you will not void your warranty by replacing the heat sink with a water block. If the card fails under warranty, the manufacturer must prove that the replacement cooling solution caused the problem to deny the warranty. Not that they won't try to ignore that little 1975 law, if you let them.
Water cooling two 290X's would surely provide better results across the board. Better performance due to never having to downclock to maintain temperature. Less noise due to replacing individual component fans with larger and quieter radiator fans. But it certainly wouldn't be cheap. You're not going to find a cheap all-in-one solution like you do for processors. You'd have to build your own custom loop, which takes time (most of it with research, so you know what you're doing), and plenty of additional money. You can easily spend 2x290X money all over again, and single 290X money at a minimum.
But if you do it right, and can afford the expense, it's worth it.