I use Staples or Avery inkjet/laser shipping labels, equivalent to Avery 5163 or 8163, 10 labels per sheet. When I was still using my ancient but sturdy HP inkjet, I found that a quick spray of something clear (I've used lacquer, clear primer and clearcoat) after the ink has dried but before I put them on the bottles made them a lot more resistant to water damage.
Then I got an HP colour laser printer for $129.99 and have been using it ever since for all my labels, no water damage at all.
To get the labels off, I put 7 bottles into a cleaning bucket and fill them and the bucket with mildly soapy water and after about 5-15 min the labels loosen up. The last batch I got wouldn't leave any residue at all when scraped off with the dull side of a knife or the edge of a spoon, but the recent package sometimes leaves a bit of gummy stuff if I don't time it right and try to scrape them off before the glue has softened or after the paper's gotten too soggy. Even after soaking, I can still read the labels clearly before I scrape 'em off.
And about glass etching, generally two ways to do it - mini sandblaster or hydrofluoric acid, which is also used as an industrial cleaning product for things other than glass (I know this because a friend of mine used to clean in a hotel and his eyeglasses got etched by the stuff he was using). If you keep it off your hands and out of your eyes (and away from pets and children) the etching paste is pretty safe.