When you get to this point, the entire town has flooded. The only solution is to go into Corona Mountain, up high above the town, and face the end boss.

First there's the lava. Hop from island to island, using your water jets to put out fire and timing your hops to get past the prongs. Not too bad.

Next, you're riding in the boat. Use the water to direct you around obstacles, not hitting anything. Gather up the blue coins along the way. Now pick up the rocket nozzel and head up through the clouds.

Finally, it's Bowser and Shadow Mario! Use your rocket nozzel to shoot up from the marked area and ground-pound each platform. It will crumble away, so you scramble along to the next one. Shoot water into Bowser's mouth when he's shooting fire to put him out. It's actually a pretty easy end battle. Celebrate!!

Super Mario Sunshine Walkthrough