Is it even possible to go from Izmir to Istanbul by water? It looks like there used to be a ferry but not anymore. I really want to go through the Dardanelles strait.
No, except on board of a cruiseship. For a ferry you can only cross the Dardanelles strait: Çanakkale-Eceabat and Lapseki-Gallipoli https://turkeytravelplanner.com/trans/Ship/dardanelles_ferries.html