Water heater thermostat plastic melted

I woke up in the middle of the night last night to the smell of burning plastic. It took me a little to figure out where it was coming from but I discovered that it was the plastic thermostat where the wire was connected. I shut off the breaker, and this morning I emptied the water heater. The water heater was also leaking from the same area. I’m not sure which came first, if the leak was the cause of the short or if the short melted the plastic and caused it to leak. If the leak was caused by the melting then the thermostat just needs replacing, but if the leak came first then I’m not sure if the tank itself may be compromised. If anyone has any advice on this please let me know. I don’t want my house to burn down.