When there is more than one check valve on a system and the upstream check valve fails, when the pump shuts down water leaks out back to ground. If the leak is small, you will only notice the problem when the pump has been shut down long enough to form a vacuum in the line (because there is no way for air to enter the pipe). Then you get water hammer when the pump starts. Pull the pipe and replace the check valve.

I think in your case, supply line hot would be the only option. For us, the old water heater was in the kitchen so we just transfered the wait time from the kitchen to the bathroom. We're having a tough time changing our water use habits. Prior to the new on-demand, turning on the shower and waiting seemed part of the routine. For handwashing after a potty stop, you knew to turn on the water when you entered! Now, in the kitchen the wait seems so long. A quick rince of dishes or a handwash doesn't seem worth the wait so everything but washing dishes is in cold water. I'm trying to figure out if the few times we need unlimited hot water (hot supply line) is worth paying for heating a small amount of hot water to sit in the pipes each time you use less than 3 gallons in the kitchen. I'm really leaning towards the cold supply line and seeing if 6 gallons will meet our needs. A dishwasher, which we do NOT currently own, uses 5-6. I've heard that hand washing wastes more water but I need to actually measure. Then the consideration is the cost. We thought we were going to heat water with gas and now are considering electric for the kitchen. I'll post what we finally decide to do.

I believe you have it figured out as well as anything out there. I especially like the idea of adding a tank before the water heater. That cycle's the water and the drain valve would alow access to water when pressure is lost. 100+ gallon tanks are in common use for commercial hot water systems. You can buy any size elect or gas heater or tank only with no means of heat. The later is used with boilers and stand -by storage alongside heaters. The key to first in first out is the dip tube.

The required tool is called "nipple extractor" but not likely available anywhere besides plumbing supply house. You might find one in irrigation tools at big box. It's an excentric that slip's inside of pipe and only work's on steel and brass. I don't understand why you need to remove the nut holding ballcock (aka "contraption inside tank") to change out the supply line. Having said that,if ballcock is plastic, cut it off with course tooth hacksaw blade then replace it with a new ballcock. If ballcock is brass,you might be able to cut the plastic nut off without damaging threads if you are carful. Not a big deal nor expenxive to replace ballcock.