Five or six lbs. per gallon will make a richer peach wine, and yes about covering the peaches with water. Use fresh, ripe fruit. You'll probably need to add some sugar and/or white wine concentrate to build it to 12%.
I disagree about using canned welches white grape juice. It's icky. Even, nasty. Go ahead, buy one and taste it. Wine made with table grapes or table grape concentrate isn't great. Same with using it as a fruit wine additive. Much better is to use a white wine grape concentrate like Alexander's if you want a white wine character to the peach wine. Any variety of white wine grape concentrate will be ok. Taste it and you'll know what will taste good in the peach wine.
Number one caution with using more peaches is to stir the must frequently--several times a day--to avoid hydrogen sulfide. Keep it aerated while it's fermenting and before racking. Also, use a bentonite slurry with the must. Still, there will be more loss in the first racking of a peach wine.
