Hydrogen bonding underlies the structure of water and all biochemical processes in aqueous medium. Analysis of modern ab initio wave functions in terms of natural bond orbitals (NBOs) strongly suggests the resonance-type "charge transfer'' (CT) character of H-bonding, contrary to the widely held classical-electrostatic viewpoint that underlies current molecular dynamics (MD) modeling technology. Quantum cluster equilibrium (QCE) theory provides an alternative ab initio-based picture of liquid water that predicts proton-ordered two-coordinate H-bonding patterns, dramatically different from the ice-like picture of electrostatics-based MD simulations. Recent X-ray absorption and Raman scattering experiments of Nilsson and co-workers confirm the microstructural two-coordinate picture of liquid water. We show how such cooperative "unsaturated'' ring/chain topologies arise naturally from the fundamental resonance-CT nature of B:...HA hydrogen bonding, which is expressed in NBO language as n(B) -> sigma(AH)* intermolecular delocalization from a filled lone pair nB of the Lewis base (B:) into the proximal antibond sigma(AH)* of the Lewis acid (HA). Stabilizing n(O) -> sigma(OH)* orbital delocalization, equivalent to partial mixing of resonance structures H2O:...HOH H3O+ ...(-):OH, is thereby seen to be the electronic origin of general enthalpic and entropic propensities that favor relatively small cyclic clusters such as water pentamers W-5c in the QCE liquid phase. We also discuss the thermodynamically competitive three-coordinate clusters (e.g., icosahedral water buckyballs, W-24), which appear to play a role in hydrophobic solvation phenomena. We conclude with suggestions for incorporating resonance-CT aspects of H-bonding into empirical MD simulation potentials in a computationally tractable manner.