How would I have a watertight or airtight pipe that is rotating at a radius, if the main reservoir pipe is not? Since I'm pretty sure I didn't do a good job of describing what I mean, the image above shows the smaller pipe, at a radius from the center, yet the pipe, might carry water from the larger "reservoir" pipe, which is not rotating.
I believe what you are describing is a not-uncommon item in process industry and is often simply referred to as a rotary joint or rotary union. These rotary joints can be configured many different ways, but they are often utilized for rotating pieces of equipment such as Rotary Steam Tube Driers (RSTDs) that rotate while needing to be supplied with steam and simultaneously returning the steam condensate across a singular rotating axis.
This is usually accomplished by making the outer surface of inside pipe a proper sealing surface, and utilizing specialized graphite seals to create a tight tolerance between the two surfaces. This effectively creates two separate flow channels; one on the inside of the inner pipe, and one on the outside of the inner pipe, separated by a graphite seal. Several companies make these, though these are the ones I'm familiar with (also pictured below)
This is a pretty nice (simple) visualization of the flow path of a rotary steam joint in an RSTD.