I'm 5'3", 18 yrs old, and 150lbs. I'm out for the summer now after exams and I really want to use this summer to get in shape. My sister gets married early next year and is picking out our dresses in August, so I'm really trying to lose some of this excess weight before then. I'd really like to get down to around 120lbs by the end of August.

I have bad eating habits (lots of fast food + sodas) so I have to cut that out, but as far as exercise goes, there is an hour-long water aerobics class that is 3 times a week here that I thought of signing up for, and also walking 2 miles a day.

Does this seem reasonable? Is it possible for me to get anywhere near my goal or are my expectations too high?

I'd say your goal is stretching it a bit... but possible. As far as exercise and diet, what matters really is your calorie deficit total. Get a food scale, calculate your BMR and get started. Your exercise plan seems reasonable, as you get in better shape, you can probably up it more as you go. But really, knowing how much you eat, and how much you lose is the key.

Good luck!