Why does John the Baptist decide upon water and baptism as the form of repentance (Catholic viewpoint)? I'm a convert from Judaism to Catholicism. Overall, I find the congruence from a theological perspective to be 80-90%. Especially, from my perspective, considering the "Jewish version" of the Trinity: God, the Spirit of God (Ruach Eloheem, appearing as early as Genesis 1:2), and the Messiah, whose prediction appears early in the Prophets. (This is oversimplified, but whatever).

It is my understanding that John the Baptist was related to Mary (from Luke). The exact relationship isn't that important, rather to say one would assume he's Jewish.

Jews have two forms of repentance, both are fairly painful, and the penitent feels cleansed. The 10-day period between the New Year and the Day of Atonement--Rosh Hashanah and Yom Kippur, respectively--is a time of contemplation of one's trespasses against God and man. It culminates in a 24-hour period of a no-food-no-water fast. About half is spent in prayer with the cantor petitioning for forgiveness on behalf of the congregation. Water fountains are covered because otherwise you'd drink from them without thinking, and one might be in a wool suit in late summer. It is a decidedly psychedelic experience; especially once the cantor starts blowing the ram's horn (shofar) at the end.

For serious screw-ups, and this probably differs from rabbi to rabbi, the sinner might be asked to perform the Teshuvah: an oral, public admission of guilt.

Considering this, baptism seems an unnecessary invention unless the motive was to provide a method of atonement for the gentiles. Which is understandable, and Matthew 3:5-6 supports all in the area around Judea headed his direction. However there is no description of why this was necessary to absolve sins or why he chose this method.

Can anyone shed some light on why John the Baptist, a Jew, would create a whole new form of repentance?

One possible answer, which doesn't really fit in my opinion, are all the examples of "unclean" things in Leviticus, and the dirtied should bathe in water even for just touching something unclean.
Many forms of baptism have existed in many Middle Eastern religions and they were not necessarily for sin absolving. They were for nation or religion changing or purification.ref

John did not have any of those purposes in mind. His baptism was a physical cleansing as a sign of repentance from sin.ref, paragraph 8 - Josephus

So John's baptism was not the same that Catholics do today. Christ's work had not yet been done. But he came as a foreshadowing or precursor of Christ's work, and as a worker to help others wash and be ready for what was coming.

There is a lot to this question, so I recommend reading the article here straight from the horse's mouth: Saint John the Baptist (catholic Encyclopedia).