John Eustace looked to have snatched it for the Hornets with an 89th-minute header - following Tom Cleverley's sending off eight minutes from time - but it was not to be.
Hooper had given Scunthorpe an undeserved first-half lead only for Danny Graham to equalise, before a dramatic finale which denied Watford a first away win in four.
It was Watford who fashioned the first goalscoring opportunity in the seventh minute when Graham set up Don Cowie and the midfielder flashed a left-footed strike wide.
Scunthorpe were on the back foot and former Middlesbrough striker Graham headed straight at Iron goalkeeper Joe Murphy after 10 minutes.
Nigel Adkins' side had a lucky escape after 22 minutes when Heidar Helguson's left-foot strike rebounded off the post.
It was all one-way traffic and Cowie crossed for Icelandic frontman Helguson, who was once again unfortunate to see his header strike the post 27 minutes in.
But Watford were made to pay for failing to take their chances when Scunthorpe took the lead with their first shot on goal three minutes before the break.
Not for the first time this season Paul Hayes played in his striker partner Hooper, who kept his composure to slid the ball past Hornets keeper Scott Loach for his 12th goal of the season.
Midfielder Martyn Woolford almost doubled Scunthorpe's lead four minutes into the second half when his venomous right-foot drive from the edge of the penalty area was palmed onto the crossbar by the highly-rated Loach.
Watford responded and Demerit should have done better when he rose highest to meet a Tom Cleverley corner but headed wide of the target.
And the Hornets were deservedly level after 64 minutes when Scunthorpe failed to clear their lines following a Dowie corner and Graham was on hand to slot home from 12 yards out.
Grant McCann had an opportunity to restore Scunthorpe's lead three minutes later but his attempted backheel was comfortably saved by Loach.
And Loach had to be at his best to deny Hooper when the lively striker raced clear but saw his shot tipped around the post by the England Under-21 international.
The visitors were reduced to 10 men nine minutes from time when on-loan Manchester United midfielder Cleverley was shown a straight red card for a rash challenge on Michael O'Connor.
But Watford looked to have snatched it when Eustace rose to head home a Jon Harley cross.
However, their was to be a final twist as Hornets skipper Demerit was penalised for handball and Hooper held his nerve to beat Loach from 12 yards.