Coca leaf questions

Coca leaf tea, in permeable tea bags like we get black and green tea, is sold in cardboard boxes in many supermarkets down there. I never noticed it had any drug-like effect on me. I suspect it's useless for anything. I was taking a prescription drug to reduce Altitude Sickness, and I suggest that you discuss that with your doctor if it applies to your trip. (We still had to stop after every ten stair steps at Machu Picchu.) Don't rely on jiveass folk remedies where your vacation time is at stake, if not your long-term health.

Folk remedies have led to many modern meds. Aspirin came from chewing willow bark for fever and pain. Coca leaves are a commonly used remedy for altitude sickness, but just like the sickness itself, it might work differently for each person. I have never been an advocate for recreational drugs, but had no qualms trying the tea or coca candies as wellas chewing raw leaves when in Peru altitudes. It is supposed to increase energy, but the down side is that it might mean testing positive for cocaine if used in high doses.
I did not need meds for altitude as I took the informed decision that the side effects were more of a risk than I chose to accept, particularly as I didn't know how I would react at altitude. The meds need to be started before reaching altitude, so more of a preventative than a symptom reducer. Oxygen, aspirin and reduced exercise or altitude can alleviate altitude symptoms.
You can buy it in leaf form at the farmers markets, and most tourist hotels have it available in the lobby 24/7. It is not a controlled drug and needs to be altered to become the cocaine we know. However, clearly there is a common chemical in both natural,or altered state if it is what is picked up in drug tests. The leaves tended to reduce symptoms a little, but I didn't like the taste. The tea or candies made little improvement, so though I used the tea in the morning with aspirin for headache, I didn't use it all day. Some on the tour found more relief than others.
I don't understand the extra water concern. Keeping hydrated is beneficial in any situation. I do not recall any excess water requirement or a significant cost increase to buy it. If you are concerned about over hydration and a dilution of electrolytes or body salts, then add hydration tablets or liquids to your water consumption.
You have to make a personal decision

Coca leaves and hot water are available in every hotel that I have stayed in at altitude in South America, including Cusco. They are in the form of loose leaves or in tea bags, as regular tea would be.

The product is widely available to buy. Why would you get into trouble? Just don’t take any home.

There is no chance of you becoming addicted to cocaine, as drug levels are very low.

I can’t tell the difference drinking it or not at altitude. My husband said he felt slightly better when drinking it, but it was marginal. It has never affected our body clocks or made us consume more water - I haven’t heard of this or come across anybody else being so affected.

I have used Coca leaves both as tea and chewing the leaves. When chewing it works best if you ad an alkaline. I’m sure the locals can advice you. In my experience it helped me with the effects of altitude, especially when I did the Salkantay trek and reached altitudes over 4000 meters.
I would not classify it as a drug like cocaine, which is so much more concentrated than what you get from a mouthfull of leaves. I would compare it to a pick me up, like a double shot if espresso. It did make me feel more energized and elevated my mood, but no more than strong coffee would, though the effects are a bit different.
I also really enjoyed the taste when used as tea.
If it’s still open, there is an interesting museum about Coca in La Paz.

As has been pointed out, every hotel has coca leaf tea available in their reception areas. Personally, I didn't find it helpful for the altitude. More helpful was staying hydrated with bottled (not tap) water, Advil, and taking a slow pace for the first few days. It is a stimulant so don't drink it right before bed.

If you have a job where you could be tested for drugs, you may want to ask to ask it if chewing on the leaves is ok. While not a drug itself, you could still come up positive in some tests.

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3 not any more than eating poppy seeds leads to heroin addiction
4 I am not aware of "screwing up body clock" nor "less sleep" If chewed it can reduce hunger and enable hard work. "Chewing" really means gently masticating, inside your cheek, a rolled up 4-6 leaves containing some lime [not the fruit] which chemically leaches out the cocaine into your saliva. Your cheek will feel like a mild shot of novocaine at a dentist. It has some mild psychological and somatic effects. Vaguely similar to and nothing more than a martini; unless you are individually sensitive. It sounds like you have limited trip time, I suggest only drinking the tea. If it tastes good, drink some more and see if you experience anything.
5 I am not aware of increased thirst. Keeping hydrated while at altitude is important.
Tea might be of use in altitude discomfort, maybe, with a big maybe.
You will be travelling at altitudes of 12-14000 feet. Airplanes keep their internal pressure in the 8-10000 feet range.
If you have never been at those altitudes, then schedule sufficient time at the first high altitude location to spend one [better two] days of acclimatization and observe standard medical precautions. That can also be suitable for jet lag. If that is Cuzco enjoy mild walking around the city square, enjoying the ambiance, frequent resting.
Have an enjoyable trip, it is a lovely area to visit.
Harvey