Sorry if I wasn't clear in my original post, but the previous owner was using an electric space heater to prevent the electric water heater from freezing.
That's an even
worse efficiency disaster (by orders of magnitude) than I was thinking! The entire kludge is probably a code violation, a potentially serious flood risk (which seems your primary concern), and possibly a fire risk too. Get rid of it!
I haven't lived through winter in this house so no idea how cold the floor gets, but if this whole contraption is an expensive futility I might just disconnect it all.
That sounds like the right plan. Take the space heater and water heater completely out, remove any plumbing that penetrates above the ceiling into the insulation, then seal the holes with appropriate materials (like can foam, etc.) It may be easier to leave the wiring in place, terminating it inside a blank electrical box, but trace the wiring back and make it's air-sealed where it crosses into conditioned space too.
Holes between conditioned space and the attic leak a disproportionate amount of air during the winter (due to "stack effect"), and often lead to wet insulation and wet wood near the leak point during cold weather. There is no such thing as an attic floor that is too air tight.
Gas water heater in the basement (two floors down).
I'm confident the dual zone heating system in the house keeps the bathroom warm. Maybe the previous owners had sensitive feet? Who knows. Heated floors is popular up here.
With the water heater two floors away recirculation system might be desirable whether it's heating the floor or not, independently of the space heating option. But if the floor heat is On retrofits it's common to use the cold supply plumbing for recirculation systems but tepid or hot water coming out the tap is likely to happen if using the cold supply as a heating return, so a dedicated return, teeing in close to the cold-inlet to the water heater would be preferable. Since it's not really needed as primary heat for the space a floor thermostat would be preferable to a wall thermostat, to avoid overheating the space.
Dual zone gas furnace
...and
not a hydronic boiler, which is why they hacked in a kludgey water-heater hazard non-solution.
Electric mesh floor heat under the flooring where the warm floor was most desired would have been more appropriate, better controlled, and probably cheaper too, even if it meant replacing some flooring.