Water heater anode rod replacement, teflon tape or no

It depends on how much you want to spend, how old your water heater is and what kind of water you have. The aluminum rods are usually the cheapest followed by magnesium. The combination rods I don't have much faith in as the least noble metal is eaten away first. powered rods that will last a lifetime are very expensive due to the platinum wire used. Your water is high in mineral content the Iron and possibly sulfur (rotten egg smell) so Magnesium would be the most cost effective. (with Low mineral content Aluminum would be the way I would go). I did have a P wire system on a metal boat instead of anodes it worked well and I no longer had to change out several a year but a water heater I think P wire systems are overkill on a home system. Make sure to turn off the water heater and flush it when installing the new anode this may help reduce the smell. Water heaters tend to last for ~10 years some 15+ so if you are at the upper end of the life scale you may want to go with the cheaper anode. Once the damage is done there is no way to reverse it.

There are only a few types of anodes out there -- different materials (aluminum, magnesium, aluminum/zinc) and different form factors (rigid vs flexible/segmented, hex head vs combination).

Your heater comes stock with an aluminum hex anode (all American/Whirlpool/US Craftmaster heaters use aluminum, and the manual for your heater has a parts diagram on page 30 that depicts a hex anode -- so you should be able to replace it with a standard hex anode, unless you have overhead clearance problems that require a flexible unit. I'd get a magnesium anode for your replacement if at all possible -- our bodies don't get along particularly well with aluminum ions.