It's not so much to do with Irish, as with the mechanics of moving from one sound to another. The position of your tongue when saying the "n" sound is similar to the position it's in when saying "ch" (as in "chat"), but different than saying "sh" (as in "she"). So unless you stop and pause between the words, you'll get some of that. Try saying "can she" and "can cheese" and focus on the position of your mouth; you should notice some of the same effect.
"he is" - tá sé
Tá sé ag ól uisce - "He is drinking water"
In both Irish an English, there is a clear distinction between ólann sé/"he drinks" and tá sé ag ól/"He is drinking". They are different tenses, and are not interchangeable.
This is true for all verbs, not just ól.