The earth and wood style can create permanent trees and walls, can water jutsu create pond or smaller body of water to drink? Is there any instance of this in the series or manga? And where does the water came from.
I would say yes.
As chakra is a special matter that can transcend body pains (in Naruto story of Kaguya and his two sons, the elder brother relieved the pain old man who tried to thug people in name of fake medicine), so possibly the water made would be pure enough to drink, although it's never been mentioned in the anime.
Another proof is that during the Fourth Shinobi War, the arc in which genin exams were conducted in the village of the hidden sand. One group had the ninjutsu to create healing water in order to cure some mosquitoes bite.
So in that way, I can deduce that the water would be drinkable.
Assuming they can use wood-style and earth-style in such a sense, I would like to believe water can be used in such a sense. I don't recall personally, because I never remember 'seeing' any characters actually drink anything besides sake or tea.
Zabuza created mist from nothing (that lake/river was nearby, but I would like to assume he was created from his chakra).
I think the water would do the same as fire jutsu. It comes from the chakra, and the jutsu turns it into that pure element.
if you take a look at the water release in wiki, you can see that:
Water Release is one of the basic elemental nature transformation techniques that allow the user to manipulate pre-existing water, or create their own, by turning their chakra into water.
But not everyone can do it:
It takes much more ability to create the water outside the body than to manipulate what is already available or expel it from their mouths.
So based on this as long as they have chackra they can have water, but probably they will spend more chackra creating water than if they were using the water that already exists.
Since it is possible to create water, probably it is possible to drink it!
Most likely yes, because there are many scenes where a certain someone used jutsu to produce water out of nothing and the water didn't vanish.
However, what I think is still not clear yet in Naruto world is, is water-producing jutsu really creates water with only chakra? Because, there are scenes (I forgot the episodes. If someone, knows please leave a comment) where people were like, "Wow, he can produce this much water in the middle of the desert? Without lake or anything around?" I wonder if this implies that water-producing jutsus actually somehow uses real water, they just transport the water to them, where high-rank shinobis are able to transport the water even if their location is far away from the water source.
This is just my thought, though. My answer to your question is my first sentence.