Phew, big, subject. :o)
Firstly traditional fly fishing tends to use a reel, the Japanese style called tenkara doesn't and is probably the style you've seen talked about on this site.
You don't have to stand in the water, just near enough to be able to cast a line to where the fish are holed up. Of course this can mean getting your feet wet in the process.
The idea of using a fishing rod and not just a stick is that the rod enables you to flick the line out further and more accurately. A rod also absorbs the power from a running fish and enables you to "play" the fish into the bank without it bumping off the hook.
I'd probably say the most important part of this type of fishing is being able to get near the fish without completely spooking them as you don't have the luxury of being able to cast long distances. If you haven't already, it may be a good idea to get yourself a pair of polarised specs and just try and find and then get close to groups of fish without them seeing you.
I can't comment on what type of permits etc you'll need where you are. I'm from the UK and it's fairly prohibitive, so I envy folk who can backpack, fish and eat their catch freely!
Good luck anyhow!