Electrical – control a 1500-watt electric wall heater with a motion-sensing switch

You're required by law to follow the labeling and instructions. This is not optional.

Fortunately, your box contains both real neutral and real ground, so you can provide whatever any smart switch will require. The switched hot is a red wire, which makes it even more straightforward. Unfortunately your drywaller or painter painted all your wires, very sloppy, so you'll need to scrape a bit to identify colors.

You can't put two wires on the same screw. You would need to pull the solitary ground wire off the screw to the left, put a 6-8” pigtail ground wire n that same screw, then splice the pigtail, freed ground and smart switch grounds together.

You misunderstand these products. Yes, "tankless heaters" are quite popular. And this isn't one.

• Tanked water heaters have a reservoir (tank). The tank takes 10-30 minutes to heat up. Once you use the tankful, you are out of hot water for awhile.
• Tankless water heaters have no tank, water streams through them and they flash heat it. Water is endless. But this takes a LOT of electricity (in the moment) and so you need fat, dedicated wires to the heater.

The tankless is a net win, because though it surges huge current during instants of hot-water use, the rest of the time it uses none at all, and that is a net win since it never heats water no-one is using.

You are talking about shutting off the heater when you're not using it to save energy, and only turning it on when you need it. Let's think about that.

• Tanked water heaters use energy all the time. Once they initially heat the water, it cools (slowly due to the insulation) but nonetheless the heater must re-fire periodically 24x7 while on standby. This is a fair amount of "vampire power".
• Tankless water heaters don't heat water when not being used, so they don't use any appreciable amount of energy when on standby.

So you see, the very idea of putting one on a motion sensor is pointless.

• For a tanked water heater, it won't even start to warm up by the time the user wants to use the hot water. The user will need to do jumping jacks in front of the motion sensor for 10-20 minutes to get hot water.
• For a tankless water heater, it will make no difference whatsoever, because the tankless isn't using energy while in standby. It's a waste of a perfectly good motion sensor.

A fair solution is to fit a 1500-1800 watt tankless in that location, with a valve to limit flow so you get respectable heat. But it won't be much flow.

An excellent solution is to run a new #12 or #10 homerun and install a 4000-6000W tankless.