Definitely a good first time effort. Your concept is not wrong, but there is a lot of room for improvement.
Look around for the best way to plumb the tank. It has been proven that plumbing in the cold water inlet at the drain fitting on the bottom saves energy over the stock configuration. It is also the best way to rig up a thermosiphon. Like Mike said, hot water rises and cool water sinks. Let mother nature be your pump.
Don't get discouraged, this is how great things get done in the way of the world. Any awesome creation goes through a process of evolution before it is finished. Keep on doing what you're doing; before you know it the thing will be done.
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