Answer:
Fluid is the higher level designation for liquids (example: water = incompressible) and gases (example: air = compressible).
Why is there such a difference in behaviour?
Fluids can change their shape easily, depending on the available space; solids cannot.
Pour a liquid (heavier than air) in a vessel and it will cover the bottom of that vessel up to a certain height (its surface level) that depends on the amount of liquid poured.
A gas (usually lighter than air) will fill all the available space and will show no surface.
Gases are compressible, liquids are not.
To demonstrate that, fill one cylinder with a gas (air will do for this example) and another one with water. Close the cylinders with a piston that can move downward in the cylinder. When the free space (the volume) inside the cylinder is reduced, its content will get pressurized. Note the difference: The piston in the water cylinder will not move, while the air cylinder can make quite some travel, depending on how much force you apply. So apparently the gas is compressible, water is not.
This different behaviour can be explained by looking at the molecules. Gas molecules move around freely with lots of space between them. That space will shrink when the available vessel volume for the gas is reduced, resulting in an increase of the pressure the gas exerts on the walls of its vessel. More molecules in a given volume also means an increase in the density of the gas.
The water molecules are already in intimate contact with each other, so there is no space that could be reduced when putting the liquid under pressure. Hence it is incompressible.
For these reasons a protective cushion would rather be filled with air than with water.
When you hit the water cushion it would feel rather hard, while the air cushion would feel more resilient.