Hello: It’s good you think about these things before building! I’m not fond of attic installations either. Heat pumps need to be serviced and that will just not get done readily if the unit is hidden away. Also, as the attic is unconditioned, efficiency of the unit will fall off in winter. Closing in the attic, so it’s part of the conditioned space would fix that and you would get some small benefit from dehumidification.
I think you need a second opinion on the legality of attic placement, but I’d still consider moving the unit to ground level with easy access. Getting hot water fast to fixtures can be done with a demand controlled pump and a good distribution system with a main line and twigs, like Gary Klein suggests. Even if you need to get an engineer to sign off on it, downsizing the lines will give you better and more efficient performance.
You don’t say how many people the heater will serve, so it’s hard to comment on what the best size or type of heat maker should be. Usually heat pumps should have more storage as they are slow recovery. That allows them to run off peak also, which could be a savings. If there is no good ground level place for a heat pump, that would push towards a very well insulated, conventional resistance heater.