Are rinsed out plastic milk jugs safe for storing water

Unless your hot water tank is very close to your hot water tap, this is a very energy inefficient. As Cascabel notes it would be faster to boil water in a electric kettle first, and then pour it into the pan. Put the pan on the heat at the same time if you are really in a hurry

Hot water systems are normally hot enough (above 55°C, 130°F) to keep water borne nasties at bay, plus if you are on town supply water it will be chlorinated etc

Normally on the first few meters of hot water pipe are copper, then it switched to normal crimped plastic plumbing. This will vary depending on your local building codes

The rate at which pipes lose their heat would ensure it never sits in the danger area for long, not that I think this is a big issue for clean plain water

In general, modern copper pipes are not soldered, they are crimped using special hand tools

Old or non-renovated houses may still be 100% copper pipes that have been soldered. This poses no extra safety risks with just clean water in the pipes

Yes, you can entirely replace water with milk. The main thing to be aware of is how prone it is to boiling over. Milk will eagerly do that on its own, and starchy water will too, so the combination has to be cooked on very low heat to avoid making a huge mess. (I think this is why the original recipe starts with water: less time with potential for boiling over, and more stable temperature when you add the milk.) You'll also probably want to be more careful about stirring the first time; if the heat is a little higher than you realize, you will start accumulating a layer on the bottom of the pan.

If you want them to cook faster and have less potential boiling over to worry about, you can always presoak in milk beforehand. I've done this overnight in the fridge, which was enough to let me make (admittedly slightly chewy) steel-cut oats in the microwave the next morning.