No, the ending of uske indicates it is a plural noun. It would be uski if it was singular.
I actually think it could mean brother as well. उसके does indicate plural, but in some cases the plural version is used to show respect. For example, "his grandmother" would translate to उसके दादी, even though she is only one person. The same way, if you want to be very polite, I think that उसके भाई पानी पीते हैं could mean his brother drinks water
It should be 'bhaio' for plural case. With 'bhai' it's singular. wrong answer.
No. भाइयों is the oblique case of brothers. भाई can both mean brother and brothers. In general, masculine words that do not end with अ are the same in plural as singular. Therefore it is correctly used here (this is no oblique case)
उसके भाई पानी पीते हैं - his/her brothers drink water
उसका भाई पानी पीता है - his/her brother drinks water
उसकी बहनें पानी पीती हैं - his/her sisters drink water
उसकी बहन पानी पीती है - his/her sister drinks water