if the gravel under the water feature is only sitting on bare soil there would be no need to remove as it should help add a drainage layer and soil and groundcovering plants could be added over the top of the gravel BUT if there is plastic sheeting under the gravel (which is possibly why it doesn't drain well) you will need to remove the plastic or at least punch numerous holes through the plastic to improve drainage (just push sections of the gravel aside and punch holes with a garden fork, (add a handful of claybreaker or soil wetting compound) push the gravel back, move aside another section punch holes etc etc) not especially difficult just tedious ... then smooth out the gravel and cover with some good soil to suit your chosen ground cover, as suggested by Julie...BUT if there is concrete under the gravel then it needs to be broken up to create drainage OR check out no dig gardens for techniques for adding growing layers over the top of impervious surfaces...or consider growing your groundcover in pots of soil buried in the gravel

wow!! such fabulous results, well done

Well done. You've done a great job and it looks fabulous.