circualtion
The effectiveness of a circulaltion system depends on whether the hot water is a "loop" from the heater to the furthers fixture and back to the heater, or if is it like a tree with a main trunk and branches to the various areas. If it is a loop, most of the system will get "instant" hot water. If it is a tree then the branch which is connected to the circulation line will get "instant" hot water and the rest will still have to evacuate some cool water first, and you do not want to get into multiple connections to the circulation line with the attendant balancing problems. The return can be connected to the bottom of the tank or the cold water inlet to the heater. If it is connected to the bottom, eventual accumulation of sediment can block the opening and stop the circulation. The air vent is unnecessary, but if used, should be after the pump to prevent the pump from pulling air in through it in the event of a low pressure situation, such as if the valve before it is partially closed, or any other situation causes loss of flow to the pump. You want the smallest pump you can find so that the flow is not so great as to cause erosion in the piping, or you should close the valve between the heater and the pump to the point it allows just enough flow to maintain the temperature.