nosebreaker I understand your issues. My wife has a thing that she will only camp in campgrounds with washrooms / with showers and the campgrounds cannot be to remote, makes for a challenge. I have started to leave her at home more than I take her as she is happier that way.
I have had an instant hot water heater at home and I loved it as once you turn it on you NEVER run out of hot water but if you are not on hook-ups with the RV forget it. You will be out of water or your waste tanks will be full before she is done a shower. Your comment of " I was planning on replacing with a tankless propane system as we won't always have hookups. Water conservation isn't a concern." Without hook-ups you are in BIG trouble. The only RV that I have seen with big enough tanks is a huge Class A and even with that after a day of long showers the fresh water was low and the waste tanks high.
AS far as if they work giving hot water for long showers yes they work. Our church bought a pile of portable ones that we used at a kids camp and they would run for 3 or 4 hours while the girls all showered. Only issue with the portable ones were they used a D cell to fire them and these died after a day but that will not apply to a built in one.
I wish I had a solution for you but honestly long showers without hoot-ups will be a problem. Maybe go with the instant hot water heater and with hook-ups, yes you will be more limited to campgrounds but that would allow what your wife wants.