1. i am trying to send the 5V signal over a length of 15mtrs .... i should be using 12V
see above, 5V will do just fine
2. I am using DC which will result in electrolysis of probes ... i should be alternating the flow of voltages between the sensor and the common plate.
absolutely
3. Relay is not a good idea for switching as suggested by Mr. Steve ... so i should be using transistors ...
Steve specifically did say "you do not need the relay"
The capacitors shown on the schematic Steve refer to will isolate well enough.

1. i will be able to alternate the flow using the P1 and some other pin to be connected to common plate. and i will be able to switch the 12V AC using BC547 kind of trasistor.... but in the end again ... when i need to sense the status of sensor (dipped or not) how do i read in the same port ...
Just refer to Steves schematic (and my 'improvement') and forget about 12V, transistors and all that Jazz.


Erik