The CPAP humidifier is probably more successful than the similar ones on Oxygen Concentrators (or tanks), since CPAPs generally use a mask quite close to where the moisture is added. The Oxy systems frequently have long hoses (50 ft plus) for those who need the oxygen while they wander about, and the moisture added by the humidifier can condense in the hose, after which it squirts and spurts up your nose.

If using oxygen as a sleep aid (for Apnea?) a shorter night time hose may help as much as anything, with the longer one reserved for walkabout use.

Breathing dry air often increases the nasal congestion you feel, but sometimes may show its effect with "being thirsty." The thirst (of the kind described) is somewhat more likely to come from some other primary cause.

(Personal observations. Not medical opinions, of course.)

John