Sponges absorb water, so they're convenient for things like blurring watercolor paint.
Literal
Sponges [topic-は] water [object-を] absorb [reason-ので] watercolor-paint [object-を] blurring-[and-such-たりする] time [at-に] is-convenient.
An art-supply explanation. 海綿 (かいめん, sponge — literally 'sea cotton') is a somewhat formal/technical term for sponge. 水彩絵具 (watercolor paint) is a four-kanji compound. ぼかす ('to blur / to soften edges') is a painting technique term. ~たりする ('do things like X') indicates blurring is one example use among others. ので gives the causal connection ('since they absorb water...').