I sympathise with you totally! I have the same problem - very hard water and even though I use good quality drying towels, in sunny weather, I have to do the same as you and wash, rinse and dry the car in sections to avoid water marks. It's a major PITA, and water marks are a nightmare to get out. I managed to polish the worst out but it's an uphill battle.
As suggested, ditch the leather and invest in some good towels, Always make the final rinse one with an open ended hose, to reduce standing water on the car. Additionally try a rinse/ drying aid - such as DoDo Juice Time to Dry - it's basically a quick detailing spray you spray on the car after rinsing which will dissipate the water further and then soak up what's left with a micro fibre drying towel.
For a more extreme remedy you could invest in a dryer such as Master Blaster but not cheap and you'll need quite a powerful one to dry whole car.
I'm so fed up with hard water that I'm about to buy one of these, which attaches to your hose and filters the water. Expensive but I've had enough of water spots!
http://www.raceglaze.co.uk/race-glaze/400-litre-0ppm-car-washing-filter/
