The Navien and a few other high end TWH's have a recirculating punp with an input nipple built into it for ease of installation. This way, you don't need to add pieces which could void the warranty easily.
As far as Pex being allowed, I've called my 4 adjacent cities, who all said they were not allowed in existing homes, but could be potentually allowed with new built houses.
For "Ktaadn", TWH's also have the option for a horizontal vent and exhaust, so the installation could be up to your imagination, as long as it is allowable per your local codes.
Just remember, if you lose power, you will not have hot water and in the event of an earthquake or other disaster, you will not have those 40-50 gallons of reserve water supply. These are my only concerns right now. I'm considering a back up generator and as far as the water, my pool has 30,000 gallons of water if needed.