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It sounds like it could be any of four things.. Most of the large growing southern magnolias won't bloom until they have some age on them. It is common for young plants to be 8-10 years old before having a lot of blooms.
You might consider having the soil tested. Magnolias prefer an acidic soil, and you can easily alter the pH if needed.
It could be the type fertilizer you are using. Too much nitrogen can cause a plant to put out foliage instead of blooms.
AND, the greywater could be too alkaline. Greywater containing sodium, bleach or borax can damage plants.

This article night answer some of your questions: https://www.gardeningknowhow.com/ornamental/trees/magnolia/magnolia-tree-care.htm
You can locate other articles by entering "magnolia" into the search box at the beginning and end of the article.
If your plant is only 18" tall, you might consider planting in a nursery pot with a 50-50 mix of good topsoil and potting soil until the root system is more developed. Even after planting a tree with a good root system it can take 2-3 years before you will see optimum growth. (Rule of thumb: first year, it sleeps; second year, it creeps; third year, it leaps.)

You haven't damaged the tree. It is a good idea to remove dead and making the plant more aesthetically pleasing is always good for you. All is well. As far as remedy for pruning, once something's been cut, it can't be reattached.

There are several reasons. These links have good information:

http://www.csmonitor.com/The-Culture/Gardening/2008/0603/why-doesnt-my-magnolia-bloom

http://www.southernliving.com/home-garden/gardens/magnolia-trees-00400000065893/

The powdery residue is from a fungal issue called powdery mildew. You can try treating the tree with neem oil, often sold as fruit tree spray in some places. Here is more information: https://www.gardeningknowhow.com/plant-problems/disease/get-the-cure-for-powdery-mildew.htm
https://www.gardeningknowhow.com/problems/pests/neem-oil-uses.htm

It sounds like the tree has a fungus. I would treat the tree with a fungicide every 2-3 weeks for a few months. I personally like neem oil as a fungicide, as it is systemic and you do not need to be able to reach all parts of the tree in order for it to be effective.