How can you recover data from a completely dead iPhone 4?

You mentioned that it may be water damaged, therefore to confirm this you should follow an ifixit guide to open up the rear cover and check the water stickers (red means water has got in, white means it is fine however these stickers are hyper sensitive and get red even with a bit of water vapour), if you have any tools to check the electrical flow on the motherboard after putting in a charger it would help, and later you may need to desolder the flash storage chip. Unfortunately these are simply my knowledge and I am not certified to do this kind of soldering work, so i am only able to help you up to here. I wish you good luck in getting your memories back.

The storage is unfortunately on the motherboard, so replacing it would just give you the data of the iPhone that board came from.

Recovering the data required making the phone usable again, replacing a few individual chips that controlled functions like USB, touchscreen, and the display.