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Make sure the soil is well draining and that it is getting a consistent watering regimen. They like moist soil but not wet. Some leaf loss is expected due to transplant shock.

https://www.gardeningknowhow.com/ornamental/shrubs/pussy-willow/growing-pussy-willows.htm

Some damage is to be expected, and it is probably not much to worry about. If it starts spreading rapidly, then you will want to go about treating the tree for infection. Make sure to water often when there is none, since they do prefer boggy, moist soils. Feeding is, largely, unnecessary and may contribute to nutrient burn, which could very well be the case here, if the ground was amended with anything.

From here, I would make sure to apply just a little DOLOMITIC LIME and WETTABLE SULFUR to prevent any future issues, and to keep the soil conditioned for the tree. This article will give you more information on the care of these trees: https://www.gardeningknowhow.com/ornamental/shrubs/pussy-willow/growing-pussy-willows.htm

These trees have, notoriously, invasive and damaging root systems. This is not advised.

I would recommend, at least, 20 feet. More will be best, but no closer than 20 feet.

This article will help you to care for the tree:

https://www.gardeningknowhow.com/ornamental/shrubs/pussy-willow/growing-pussy-willows.htm

That was correct to plant it away from utility lines but I hope there is a spigot nearby. Is it in a low spot or boggy area that will help to keep the soil moist? If not, you will need to supply ample moisture to keep it happy. You can deep water it once a week with a hose or if you have anything like drip irrigation set up in the yard you can add a line to the pussy willow. Here is more:

https://www.gardeningknowhow.com/garden-how-to/watering/watering-garden.htm

https://www.gardeningknowhow.com/ornamental/shrubs/pussy-willow/growing-pussy-willows.htm

It could be canker disease, giant willow aphid, or just stress from all those things that happened to it this year. Watering every other day sounds like a lot to me. Is that what you normally do or is it in response to the dieback? If so, I would cut back to your normal watering regime.
You may want to call your local extension agent and see if others are experiencing dieback on their pussy willows because of an environmental issue.

http://plantclinic.cornell.edu/factsheets/willowblackcanker.pdf

https://hortnews.extension.iastate.edu/giant-bark-aphid

Generally, once the heat of Summer has passed can be a good time. That or in Spring after the last frost.

Just don't plant during the temperature extreme seasons and it will likely take to its spot as long as your planting is correct.

This article will help:

https://www.gardeningknowhow.com/ornamental/shrubs/pussy-willow/growing-pussy-willows.htm