The people are pissed. And rightly so. Moses has taken them on a lengthy march, forced them to watch an Egyptian genocide, and now has failed to supply them with drinking water. He obviously hasn't done much entertaining in his life. After all that spicy-sweet manna, I imagine that the people are parched. Moses is hot under the collar, worried that he's gonna get stoned.
Something that I quite like here is that the people are openly questioning of God. They ask Moses, "Why did you bring us up out of Egypt, to kill us and our children and our cattle with thirst?" (Exo 17:3). Fair question. So what does God do? He proves his existence. He gets Moses to rap on a stone with his rod and water comes gushing out. Magic. Too bad it doesn't work like that anymore.
I'd be lying if I said that I've paid rapt attention to every single word that I've read in the Bible thus far. That said, I'm pretty sure that I've never even heard of someone by the name of Amalek... ? Anyways, this random guy Amalek turns up and does battle with the people of Israel. Okay. This seems to be the equivalent of planting a car chase in the middle of a romantic comedy to ramp things up for the audience. Amalek eventually gets "mowed down" with a sword (Exo 17:13). This is a good thing.
Moses goes on a bit of a power trip. I guess it goes to his head that he's the "water guy". He starts budding into people's business and trying to settle their disputes, becoming a de facto judge and jury. He holds court for hours at a time (just like Tyra Banks). His father-in-law tells him, (in that blunt way that only an in-law can) "What you are doing is not good" (Exo 18:17). His father-in-law's name, by the way, is Jethro, a name which I'm sure is on the top ten baby names list for hipsters.