Bitter herbs decrease happiness, so do Fresh Water, Soda Pop & Lemonade increase happiness?
Also, does a Pokemon's DW activity increase its happiness?
No, the vending drinks and DW activity have no effect on the happiness of the Pokemon. Only walking 128 steps, the massage lady, using vitamins, level up, using EV Berries, fainting, using Herbs and Trading affects happiness. Source: http://bulbapedia.bulbagarden.net/wiki/Happiness#Generation_V