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‘Shar’ has its roots in Persian and connotes violence or trouble. Hence a ‘shar-pasand’ person is a trouble maker.
‘Aab’ is the Urdu word for water. Punj-aab is the land of 5 rivers.
Hence, shar-aab is water that creates trouble, otherwise known as liquor or wine.
Another word for sharaab in Urdu is also ‘mai’ and ‘mai-khana’ is a tavern/bar. ‘Saghar’ is the Urdu lafz for a wine goblet.
Here is an intoxicating couplet by Meer Taqi Meer:
Yaaron khataa ma’af meri, main nashe mein hoon
Saghar mein mai, mai mein nasha, main nashe mein hoon
Friends forgive my sins, I’m inebriated. There’s wine in the cup, intoxication in the wine, I’m inebriated.
Sharaabi was also a popular 1984 Bollywood film directed by Prakash Mehra starring Amitabh Bachchan in the lead as a Sharaabi (drunkard). It was loosely based on Dudley Moore’s ‘Arthur’. Below is a popular song from the movie:
urduwallahs 
You explain urdu words in a very simple and brilliant manner. This is really commendable. Can I elaborate a little on the word ‘sharab’ ? oh thanks! There is another word for sharab in urdu; that is ‘bada’. I recall one couplet by Qateel shifai using this word:
‘Bada phir bada hai, main to zahar bhi pee jaon Qatee.. l’
‘Shart yeh hai…., koiyee baahon mein sabhalay mujh ko’.
maikhwari or sharab peena, also used very widely in urdu shairy by diffrent poets for different moods. Is mazmoon par, mujhay is waqt yeh ashar yaad arahay hain:-
‘ Aap ki makhmoor aankhon ki qasam ‘ (makhmoor meaning: nasheeli)
‘ Meri mai khuwari abhi tak raaz hai………..’
And
‘Pee liya kartay hain jeenay ki tamanna mein kabhi’
‘Dagmagana bhi zaroori hai sambhalnay kay liyey…’
Your etymology of the word sharaab is clearly wrong. Please correct this post. The word sharaab is not farsi in origin. It comes from the arabic verb ‘sharab’ which means ‘to drink’. The word sharbat (a drink) is also derived from the same verb. It is has got nothing to do with shar and aab. See this: http://en.m.wiktionary.org/wiki/%D8%B4%D8%B1%D8%A7%D8%A8