Your Croton looks great. It just needed more moisture around its roots. It is a tropical plant so it certainly won't tolerate temps close to or below freezing. However, it also does not do well in warm, dry air indoors. A terra coot pot is fine; it just will need to be watered a bit more than if it were in a plastic pot. Tap water is fine as long as it is not unusually hard.
You seem to be on the right track now. If it starts to wilt again, just give it a good soak!
