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I can't figure the location, but I've been through Niniveh a few times. Hello fellow Hoosiers.
And my Uncle lives in Nineveh / Princes Lakes (and Grand parents did). So I know all about the issues you mentioned. Small world!
A small lake near where I grew up was surrounded by older cottages/homes. Eventually enough of their septic systems failed that they had to buy and connect/pump to a very expensive treatment plant and 1.5 mile long pressurized pipe to discharge to a small river. Note that drain fields are conservatively designed for 25 years use, based on soil conditions and number of users (2 per stated bedroom). The solids that make it past the tank fill the open spaces between soil particles and when those space fill the field start to leech beyond, meaning that partially treated sewage makes to the surface, nearby water, and/or groundwater. Waterfronts come in many forms - choose carefully. We have an old open pit clay mine that has been "converted" to a residential development. It has no discharge, so eventually will be a mess. Each house has a septic tank and a pump. The discharge goes to a lagoon and then pumped again to a small river. Not a reliable long term solution. My vote is for a small stream (sized for canoe traffic only).
I've found the definition of lake or pond makes no sense. In Massachusetts, for instance, everything seems to be a "pond", no matter what size or whether they are fed or not fed by a river. When you can water ski on it, I say it's a lake.