I have seen a lot of new homes with Rinnai systems, all with constant public water supply pressure though. So I don't know how it would work with gravity as pressure. I don't know much about plumbing though, and am in need of a Plumber myself.
My parent's lake cottage has a well for the water supply. It is a two pump system, one down in the well to get the water up to the supply tank in the pumphouse. In the pumphouse we have another pump that keeps pressure on the system to make water pressure for the entire house.
The water line goes in the house and is split between the (ground level) electric water heater for the hot water taps, and the cold water taps. It takes about half a minute or so to get hot water upstairs.
That's all I know about plumbing.