It is well-known that collagen is the most abundant protein in the human body; however, what is not often appreciated is its fascinating physical chemistry and molecular physics. In this Perspective, we aim to expose some of the physicochemical phenomena associated with the hydration of collagen and to examine the role collagen's hydration water plays in determining its biological function as well as applications ranging from radiology to bioengineering. The main focus is on the Magic-Angle Effect, a phenomenon observed in Nuclear Magnetic Resonance (NMR) spectroscopy and Magnetic Resonance Imaging (MRI) of anisotropic collagenous tissues such as articular cartilage and tendon. While the effect has been known in NMR and MRI for decades, its exact molecular mechanism remains a topic of debate and continuing research in scientific literature. We survey some of the latest research aiming to develop a comprehensive molecular-level model of the Magic-Angle Effect. We also touch on other fields where understanding of collagen hydration is important, particularly nanomechanics and mechanobiology, biomaterials, and piezoelectric sensors.