Wires simply need to be covered in an insulator. Motors and generators need to be kept in a sealed, watertight box. Electrical connections are relatively easy; just fill the connector with Shoe Goo or something similar to keep the water out. Special seals are needed for the axle of the motor. They are often made of rubber or something similar, and are sealed and lubricated with a little bit of oil.

Saltwater conducts electricity, which is why water and electronics don't mix (even tap water has enough salt in it to conduct electricity). All you need is something to keep the water from getting at the electronics. Normally this is done by keeping the wires in insulated tubes, and by keeping the leads that attach to the motor air-tight (and thus dry) as well. The thing that actually runs the motor is the magnetic field generated by the current flowing in the wires, and there's nothing about water and magnetism that doesn't mix.