If your pump is for a beer dispensing cooler, it's probably a positive-displacement pump. If you have any unplanned restriction in a vessel jacket, the pump can easily damage the jacket.
If it's a PD pump, replace it with a centrifugal.
As for using a water heater tank for your glycol back, don't. The tank will be insulated with fiberglass or rock wool, and not air-tight, so you will accumulate a lot of condensation on the outer walls of the tank, causing it to rust from the outside in--not to mention making an unholy mess.
I've fabbed a couple of glycol backs by wrapping a plastic 55-gal drum with Armaflex sheets. Use lots of contact cement to be sure it's as air-tight as possible and it'll last you for many years--unless your brewery cat discovers how much fun it is to scratch the Armaflex off.
Bulkhead fittings are easy to find online, and very easy to install. Home-brew suppliers are a good place to look, and usually have ones with curved washers to match the curve of various vessels--like 55 gal drums.
Timm Turrentine
Brewerywright,
Terminal Gravity Brewing,
Enterprise. Oregon.