Your best bet is to split it into even doses throughout the day. Your body will make good use of it. Now, if you have some before bed, it won't hurt. Essentially, at night when you sleep, two types of adaptations will happen (assuming you have disrupted homeostasis):
- Starting when you hit REM sleep, your testosterone levels will peak and remain at that level until you wake up.
- Starting when you hit deep sleep, and ending about 1 hour later your growth hormone will be at it's peak.
Testosterone and growth hormone are both known to cause muscle growth and make good use of the amino acids and proteins you have in your body at the time. Note that these are normal hormones produced and managed by your body, not steroids added to cause you to artificially take in more protein. (along with their side effects)
The studies I have read have conflicting things to say about timing the protein, and the best I can surmise is that the usefulness of the protein depends on your level of training/adaptation and the population that the studies used. There are many variables that can affect protein absorption and unfortunately, no-one has a clear understanding of how they all interrelate which compromises the usefulness of the studies.
By splitting your protein intake throughout the day, you are spreading the odds that you will be at a peak protein consuming time. Not to mention that some of the protein absorption depends on your natural circadian rhythms. In short you will have some times of the year where you make better use of it than others.
If you overthink this, you'll drive yourself nuts.
And yes, hydration assists the body in processing protein. 2 L a day is an absolute minimum, better 3+ L a day. In the interest of full disclosure, all water content hydrates.