What is the liquid that forms on top of yogurt? Is it water or does it have nutrients? Should it be drained or stirred back into the yogurt?

That liquid is whey, the very stuff that Little Miss Muffet ate on a tuffet.

When the bacteria that forms yogurt grows sufficiently, the milk coagulates. The
proteins squeeze together and form curds, pushing out the watery whey.

Whey may be watery, but it isn’t water. Whey contains sugar, minerals, some
protein and lactose.

Don’t waste it.

Mix it back in with the rest of the yogurt. You’ll be a better person (nutritionally, anyway) for it.