Great responses.
Hot Water Heater: Perfectly answered my question. If I want electric only hot water, all I need to do is turn on the outside switch. Do not turn on the inside switch.
So if I want LP only, do I just turn on the INSIDE switch?
AC: Yes, 65 is needed when you are high humility and 80 at night. Believe it or not, the AC does cycle on and off and can get that temp. Again, we did have the fan on LOW, so the fan ran constantly. I am hoping that is what caused the condensation. (Typically in your home when you have your ac on, and the fan blows while the compressor is not going, humility forms. I am hoping this is the same deal.)
CO Alarm: I am going to buy a back up AND have the dealer replace what is there just to be safe.