It's not practical to walk as it would mean walking part of the way on a busy highway and negotiating some stiff ascents and descents. It would take just over 10 minutes in a car. Perhaps someone could advise on local buses as an alternative to a taxi.
it depends what you mean within wlking distance. It took us from Machico White Waters Hotel to Santa Cruz 10-15 min by Taxi. We went in the evining for a dinner. If you want to hike and / or include into a daytour you can surely walk it.
Get an answer from White Waters Hotel staff and past guests.