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The game presents 10 damage types: acid, cold, fire, force, lightning, necrotic, poison, psychic, radiant, thunder.
And my players asked a few things about using spells that deal typed damage in and out of combat:
Does Psychic damage work on undead or on creatures with Int or Wis 1 or less?
Radiant damage is basically a divine light, so in physics terms it's infrared rays. Can it be used to "toast" bacterias and purify (non magic) water?
No creature is immune to any kind of damage unless its stat block explicitly says it is.
You can think of psychic damage as interfering with a creature's "nervous system" or whatever magical thing it uses as an equivalent. Even mindless undead have some way of perceiving their environment and then manipulating the various parts of their body to get their body over to it and attack it; psychic damage is essentially high power feedback (like the really loud screech when you get a microphone next to its speaker) on these channels. If something would be better classified as a trap than as a creature, then it's probably immune to psychic damage.
Radiant damage isn't really light so much as it is divine power. It happens to look like light, but it's not; a laser or high-intensity infrared source would do fire damage. Radiant damage is like a flashlight that's been imbued with holy power to accomplish a specific task (namely, destroying some poor creature); the holy power only does what the ability says it does (damage), so powers that do radiant damage can't be used for other purposes unless blinking a bright flashlight briefly could accomplish those same purposes.
A brief discussion of the other damage types:
As I set out in this answer, D&D 4e is a firmly mechanical system that isn't particularly interested in "what makes sense" or "how it would work in the real world." It's sacrificed that for balance, regularity, and other meta-issues that plagued earlier editions of the game. (I render no absolute judgement on whether this is a good thing; it depends entirely on what kind of game experience your group values).
So there aren't any rules about mundane water sterilization (because it's Dungeons & Dragons, not Dungeons & Utilities Services, and the rules reflect that priority), and damage types work normally against anything that isn't explicitly resistant or immune to them (which is good, balance-wise, because there are entire classes dedicated to dealing psychic damage and they'd be hosed against undead in the scenario your player proposes).
Just recognize there will be systemic complications which rise from that kind of precedent.
It's up to your group whether you bring real-world considerations (physics, logic, etc) into the game's rules... but if you do it's important to remember that the system isn't expecting such considerations. You'll probably find increasing contradictions and weird cul-de-sacs of logic if you go down this road, and you'll need to be prepared to deal with them.
D&D 3.5 has similar problems, just disguised under a massive pile of increasingly complicated subsystems designed to try handling these issues. No RPG system can accurately reflect reality; we don't know enough about reality, nor do we have the time to model it. If 4e hasn't chosen to model the elements of reality that your party wants to explore, either tack on the house-rules you need or find system more compatible with the group's desired experience.
