Spray foam (open or closed cell) is what you'd need on the ducts to avoid condensation with a ventilated crawlspace, but air-sealing and insulating the crawlspace would be a better solution, at which point sealing the seams & joints with duct-mastic and using R6 fiberglass duct insulation would be fine.
Is the water heater electric, or propane? Most electric tanks have pretty good insulation, most gas/propane not so much, but care must be taken not to create fire or exhaust problems when retrofitting them.
All near-tank plumbing (within 6-10', even the cold) needs to be insulated with at least 5/8" closed cell foam pipe insulation (3/4" is better). The stuff they sell at box stores is only 3/8"- better than nothing, but at the price of propane or electricity it's cost-effective to double that. In a vented crawlspace it's probably worth putting at least the cheap 3/8" goods on the rest of the cold plumbing- it won't keep it from freezing but it will have a very modest return on energy use. If you go ahead and seal & insulate the crawlspace you can skip insulating the cold feed.
In NC vented crawlspaces INCREASE rather than decrease the humidity level of the structural wood in the crawlspace, since the summertime dew points are much higher than the ground temperatures. In a air conditioned house and have insulated the floors this can become a serious mold hazard, since the cold subfloor &/or joist edges can all be well below the dew point of the outdoor air to which it is exposed.