Is liquid cooling necessary for high CPU performance over extended periods?

In short, no

Liquid cooling is still mainly for bragging rights. Getting those extra MHz from hardware and pushing for extra benchmark points.

Will you need something aftermarket to cool your system? Absolutely.

Of course keeping temperatures as low as possible is always a thing we strive for, but you have to weigh up the costs and risks to the performance benefits.
Pumps, radiators, reservoirs, heat sinks, fans, tubing and coolant add large amounts to a build's cost.
Even All-in-one's are quite pricey (and can cause problems, boil-off, pump fail's etc).

Another downside with water cooling is that it is difficult to tell that anything has failed. They can operate near silently and leaks can go undetected until something blows up.
This is not to say they are less reliable than fan-cooled systems but at least you know if your loud fans have stopped working and there's very little chance of them taking anything else out with them if you are around monitoring.

Basically I would get a beefy heat-sink with at least a 120mm fan, something like a Noctua or Zalman (I am not affiliated) and then an intake and an exhaust to keep cool air moving. RAM cooling is rarely necessary but solutions are available from companies such as Corsair.

Get quality assured names with plenty of reviews. This PC sounds fairly mission critical so invest wisely to keep it running.

For reliability, you may want to look into passively cooling the CPU with an oversized heatsink and install extra large fans in the chassis.

The reason is having the CPU fan fail tends to cause a much longer downtime than replacing a chassis fan. If you run the chassis fan directly off the PSU instead of the mobo, you can even change them out without turning off your computer.

Larger fans also last longer because it doesn't need to spin as fast to push the same volume of air. It will also naturally run quieter for the same reason.

Honestly, as an owner of the same CPU in a similar system, I would say most definitely. Do not be fooled, the 5960X is a very fast and efficient CPU, but it's also deceptively hot because it's actually so much smaller than the 3930k I upgraded from and thus the heat is much more concentrated. And even the 3930k was very heat sensitive.

I RMA'd my 3930k due to heat damage while it was running on air and talked to Intel directly about it, so I will talk more about that than the 5930k I have now.

If you actually look at the specification of the CPU, which nobody ever seems to do these days, it's only rated for 66 degrees max (virtually the same as the 3930k). According to Intel, that's because the CPU is so far from the heat spreader and (CPU) case temp sensors that when the sensor reads 66, the cores are significantly higher in places. I RMA'd my 3930k due to heat-induced failure and it never did over 75C but it must have been a lot more because that managed to burn out TSC circuits in the chip and it's self reporting features refused to boot any OS.

That was on a Arctic Freezer i30 at stock clocks. It's actually damn near impossible to keep the 3930k under 62C (it's max is a little lower than the 5960X) under load without a very noisy system, and I'd actually alt-tab from gaming sometimes to let the CPU cool, so add two cores, make all of them smaller (so the heat is more densely packed) and your problems only increase, even with lower power draw.

I bought a closed loop water-cooler. I suggest you do the same. (H80 FYI) Never tried to overclock beforehand, but after I can run the 3930k @ 4.3 @ 63C under load, and low 50s stock under load. It's my only Closed loop, so I expect the same from others, but it's built very solid and I highly doubt it will ever leak. I would recommend not building your own for that very reason.

I used the same cooler on my 5930k, and it maxes 56C. I'm don't really see a point in oc atm so I haven't tried. My baby is still new lol. I will comment that you might wanna consider ECC RAM and a Xeon if you're doing something like Programming. I've ran into guys that had single bit errors while compiling that caused their software to be released with a bug that took them an incredibly long time to figure out and fix.