This may be a stupid observation but if spongebob is a sponge you would think he would just absorb all the water right?

Not to throw a wrench in your little fantasy but there are a lot of real sponges in the ocean. A sponge can only absorb so much water and the ocean is really, really big. Fill a bathtub and throw in a sponge. The sponge will absorb so much. The ocean is much bigger, and denser.