1. Heat in zone 3 but no heat in zone 1 - probably means the zone 1 Aquahot pump is not pushing the heated coolant through the zone 1 hoses. Tap on the pumps to shake the internals loose so they will spin.
The electric heating element does not produce as much heat as the diesel burner but it should supply enough heat for showers and/or washing dishes. The electric heating element simply cannot keep the water hot for continuous use. Our electric heating element will supply enough heated water for two showers - barely.
If your coach has the engine preheat function associated with the Aquahot, then while traveling the engine coolant will be pushed through the Aquahot allowing the coach faucets, shower, etc., to have heated water. That heated coolant from the engine also supplies heat to your dash heater/window defrost. Thus, when plugged in your electric element is heating water but when traveling your engine is supplying heat for heating water - two different heat sources. We had to replace our electric element as it got too old to function properly.
2. Tires - I do not know your tires but I will say we have 315/80R22.5 tires on our steering axle with no clearance problem.
3. Our insta-hot stopped working after a few years from purchasing the coach in 2012. We didn't use it much so I never fixed it.