To make the dough, combine water, yeast, and 1 tsp sugar in a cup and set aside. In a large bowl, combine the milk, remaining 2/3 cup sugar, butter, eggs, and salt. Stir well and add the yeast mixture. Add 3 1/2 cups flour and beat until smooth. Stir in enough of the remaining flour until the dough is slightly stiff -- it will be sticky.
Turn out the dough onto a well-floured surface and knead for 5-10 minutes, adding just enough flour to keep the dough from sticking. Place in a well-buttered bowl, cover, and let rise in a warm place free from drafts until doubled in volume, 1- 1/4 hours. Punch down and let rest for 5 minute Roll out on a lightly floured surface into a 15x20-inch rectangle.
To make the filling, spread half of the melted butter on the dough. In a small bowl, combine 1 1/2 cups of the sugar and cinnamon. Sprinkle over the dough, then sprinkle with walnuts and raisins if using. Roll up like a jelly roll and pinch the edges together to seal. Cut the roll into 12 or 18 slices.
If making 12 buns, use the remaining butter to coat the bottoms of a 9x13-inch baking pan and an 8-inch baking pan. If making 18 buns, use 2 9x13-inch pans. Sprinkle the pans with the remaining 1/4 cup sugar. Place the cinnamon bun slices close together in the pans. Cover and let rise until doubled, about 45 minutes.
Bake at 350 degrees for 25-30 minutes, or until the buns are nicely browned. Let cool slightly before glazing.
To make the glaze, combine the melted butter, sugar, and vanilla. Add the water 1 T at a time until you have a spreadable glaze. Spread over buns and serve.