This plague is named after what you can see and not after what you can smell - although what you can smell is worse than what you can see!
In truth water turning into blood did not bother the Egyptian people very much, as it was common among ancient nations to drink blood. Imagine if turning on the water tap would cause Coca Cola to come out ...
What made this a plague was the fact that the fish died, and as a result and the river became foul (7:21). That is why the Egyptians could no longer drink the water from the river. Therefore, the word ויבאש (the plague of the foul smelling waters) would have been a better word to describe the plague than Makkos Dam. The reason why the plague is not named בייאוש is due to the fact that the foul-smelling river was not visible to the eye. Thus, it is called DAM after the water’s turning into blood (Da'as Zekeinim).
Wine is the answer to my problem!
The reason why Pharaoh did not pay any attention to this plague (7:23) was due to the fact that he said that he was happy to be able to just drink wine from now on. It was only the general Egyptian populace that were suffering from the lack of proper drinking water (Sechel Tov).
