ISO is a measure of sensitivity to light. It is inherited from film. It used to be called ASA.
Basically, if you double the ISO, from 50 to 100, you can shoot twice as fast shutter speed, same aperture, and get the same exposure, though with more noise.
The higher ISO settings basically just amplify the collected signal more, and can't help but amplify the noise as well. So whenever possible, use the lowest ISO only, and get enough flash to make it work.
White balance is to make up for the changing spectral mix of ambient light. The human eye does this automatically, not really noticing the warm yellow color of a white sheet of paper, in incandecent lighting, compared to daylight.
But film and sensors can't automatically compensate. If you use dalight film, or daylight WB setting, indoors with flourescent or incandecent lights, you will get horrible looking results.
So the WB is to compensate for the ambient lighting. If you are in the top few feet of clear tropical water, daylight will work fine. If you are deeper, nothing but fill flash, to put back the totally missing reds and yellows, will give you good colors.
For me, shooting RAW mode is a must, so that you can set the WB after the fact, rather than setting it ahead of time, and hoping you got it right.
But lacking RAW, you'll have to experiment with auto WB and flash WB, and see what works. You'll likely want to do some color corrections after the fact.
Hope this helps.
Don
