Distilled Water

That is absurd. There is plenty of O2 in distilled water. Gasses will dissolve back into water fairly quickly, and when you buy the stuff off the shelf that is pretty much no way that there CAN'T be O2 in it since they do nto vacuum seal distilled water bottles.

I would actually advocate using distilled water. I hear in here all teh time about people having to adjust acidity from concentrates (kits especially I find troubling). Think, what is distilled water? It is water that has been boiled and condensed to remove much of the mineral content. It is those minerals that are dinking up your acid to begin with. Again, thick about it. When they concentrate juice what do they remove? Water and only water, the concentrate has all the minerals that the juice had....adding tap water (which is almost always buffed at a basic pH by calcium and potassium salts) can only raise your pH more requiring you to add more acid to correct it.

As far as your smell anbd taste goes I would not worry. I smell sulfur all the time when making hard ciders, plus apples are very high in malic acid which does nto taste very good...but it ages out. For that wine you coudl consider malolactic acid fermentation too.