Backhoe 1999 New Holland E555 Hydraulic Fluid Drain/Replace

[welovejmj]

I have an E555 backhoe. Just removed a leaking swing cylinder to have the seals replaced. The fluid was a cream color, and I was told by a neighbor the fluid has water in it. He suggested I drain it and refill with new fluid. Two questions: 1) where is it best to drain the fluid to get the most out (the reservoir looks like it has a plug I could remove)? And, 2) what type of fluid goes back in (if you can, be as specific as possible. I'm new to this stuff...).
Thanks!