Will this work

The system doesn’t work as you describe.
The 3rd line to the farthest faucet going back to the bottom of the water heater is a return line.
The pump draws water out the normal hot water line and returns it to the water heater via this 3rd line.

While it will help with instant hot water at the shower you could run the water down the drain and wait for hot water.
This is not true for the clothes washing machine in the same room. Without some way to circulate the water before you turn on the washing machine you can only wash clothes in cold water because the tub fills up before the hot water gets to that room.
I just looked up tankless water heater and saw Amazon has some for under $100 110 volt and that would work good to ad to your hot line at that end and might be cheaper than the circulating heat pump. I checked on my 50 ft line. holds less than a gallon of water and takes 29 seconds to get warm and another 23 seconds to be hot.
 
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