Tank vs Tankless and recirculation pumps

We're fixing up a large old house in western PA and considering options for hot water. Most of the time it's just me and my wife in the house. Mother in law may also move in. Once or twice a year we expect we will have larger groups of family visiting (10-15 people staying with us).

The house is 3 stories with a kitchen and bath on the first (both in the back) and 2 baths on the second floor (front and side). Currently there is a 40 gallon electric tank in the back of the basement. That supply is adequate for the 2 of us, but takes a minute or two for hot water to get to the second floor, which isn't ideal when you're just washing your hands.

Originally we were going to have a tankless unit installed on the second floor in a closet that could supply those bathrooms while the tank in the basement supplied the first floor. We had a plumber come out and explain that the venting would be very challenging and recommended we install that tankless unit in the basement and put recirculating pumps for the 2nd floor bathrooms.

I know the recirculating pumps would solve the on-demand issue, but in terms of efficiency and overall cost (upfront and ongoing use + maintenance) would we just be better off putting in a second tank (gas) in the front of the basement with recirculating pumps? Or maybe even just upsize the 40 gallon and stick to one large tank with pumps? I hate the idea of holding that much water when it's only 2 people most of the time, but 40 gallons would never be enough when family visits.