If your property is really that challenging to work with all the more reason to get somebody out there to have a look and educate you on the possibilities at least from a septic standpoint. There are so many new and innovative enviro-septic systems out there many whos very existence is to solve the very problem you have - a challenging lot or lack of space. Therefore you average septic guy may not have an answer for you but somebody well versed in alterative designs might have an option for you. They will also be able to advise you on what DES will find permissible as well. No matter what though septic systems on the islands will cost more due to the logistical nature of getting equipment and materials out there.
Far as water goes, grab it from the lake. Easy enough to do, I haul out drinking water and use water from the lake for everything else. I'll cook with lake water so long as it includes boiling it for a while. There are treatment options that will be more than likely far less expensive than hauling out a drilling crew. Several have already pointed out various options there.
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