@petersibley @nicklockwood
Yes, not only is it possible to be precise about these definitions, but they become completely standard if you adopt language from mathematics—rather than the ad-hoc definitions from computer vision/graphics/etc., which (as you mention) tends to be quite fragmented.
TL;DR: "watertight" basically means it's the boundary of a solid; "manifold" is more like the thing you said—but requires some refinement. Also, the two aren't quite equivalent—e.g., the boundary of two cubes touching at a single corner isn't manifold, but is watertight.
The most important first step is to clearly separate out two factors:
1. connectivity, and
2. geometry.
As you point out, it's possible to have manifold connectivity even when the geometry has self-intersections, etc. But that's ok—we'll ultimately be able to tease these things apart, if we can have patience for a moment.
Starting just with connectivity, let's assume that our mesh has only triangles. After all, if we have other kinds of polygons, we can always split them into triangles—and the same definitions will apply.
More precisely, when we say "triangle mesh" in computer graphics, the connectivity we're thinking of is almost universally that of a pure abstract simplicial 2-complex:
https://en.wikipedia.org/wiki/Abstract_simplicial_complex
Such a mesh forbids things like two distinct triangles with the same three vertices, or a triangle where one of its edges is glued to another. "Pure" means there are no dangling edges or floating vertices.