[RPG] Can clerics create holy water

#3 - Players typically purchase their starting gear from the gold they are given at first level. The SRD has a great article on character creation, and equipment is under section 8. The gold you have listed is, according to the SRD, actually the average for each class. As a DM, you can choose to give them the average for first level, or make them roll.

It would be good for them to look at the pre-bought sets the describe, so they can understand what's typically needed. Once they get more comfortable, they may branch out according to how they like to play their character.

Of course, as the DM you may overrule this and force them to start with a certain set of items, or give them more gold, etc. Seeing as this is your first time playing, however, I highly suggest sticking to rules as written since this sort of overruling may very well have unintended side effects.

As an aside, wizards get so little at first level because they don't need (and cannot wear) armor, nor do they need expensive weapons like swords and bows.

No, this does not exist in 5e.

Implementing it in 5e may be less satisfying, since the increase in proficiency bonus covers many of the incremental advancement options from previous rulesets in one swoop.

So for the fighter, for example, you'd have two options - the one feature they get every level or the proficiency advance they get every 5th level. It's pretty difficult to make that incremental. Even with something like a druid, they get a spell advance and then 0-2 other improvements. Within a single level there's not enough advance, on average, to break it up much.

Another way to implement incremental advancement is to let the character apply the next larger proficiency bonus to one of (attacks, saves, skill checks) per level they go up (not between levels). That seems pretty fiddly, though, and lets someone min-max what they're already good at levels ahead of time.