Water heater replacement, repipe, bathroom reno questions

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Too Ambitious

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North Carolina
I am planning to put in a Rheem hybrid. I'm also going to reno the farthest bathroom from the heater (70'-80' run) within the next year & take that opportunity to repipe since a lot of the copper is corroded. Right now there are 3 full baths, and I am planning to add another in 5-10 years for a mother-in-law suite.

Question 1:

The supply from the meter (at the curb) is 3/4", up to the PRV in my crawl space. Right now everything else is 1/2" or smaller, including the trunks and supply to the WH. I am planning to upsize to 1" cold and 3/4" hot trunks after the PRV. Is 1" overkill considering the supply from the city is only 3/4"?

Question 2:

By code I need to have a vacuum breaker since the water heater is bottom fed. Does it matter whether I put this before or after the thermal expansion tank? How close does it need to be to the WH?

Question 3:

I am moving the water heater location to a storage room in a converted garage. (Basement is too short for hybrid.) I am planning to pipe the condensate and drain pan through the wall of the main house, down into a sump pit in my basement mechanical room.

If I wanted to do the same with with the T&P discharge, my reading of P2804.6.1 is that I would need an air gap or air gap fitting in the same room as the WH. Is that correct?
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