CBearden
Your going in the right direction. I know from experience that it can be difficult to get good information. Alot have read about it. "It should work"
Yes indeed the heat will radiate to the second floor. Our first floor heated concrete slab warms the second floor no problem. BUT for air-conditioning you will need ducts in the second floor to allow the cold dense air to fall to the lower. If at all you will need a little blast of heat to the second floor you can get a little blast up there with the air-conditioning ducts. But I doubt you will ever require heat to be forced up to the second floor by what we experience here. For sure air con.
Insulation between the first & second floor totally not nessisary. Put that insulation in the second floor ceiling/roof. Min. code maybe R38 but R50-60 would really be the best investment. The greatest heat loss is through the roof.
If you have good sun fraction for your location the solar hot water can be a large portion of you heating load. But you require close to 30% of panel vs. floor area. And you can DIY. It will work.
Yes you can hack your own heat-pump it will work and work well but:: numerous units with seperate HX or to add up to the total load for each zone could get expensive. Brazed plate heat-exchangers are not cheap. One unit sized correctly or just slightly smaller as AC Hacker had mentioned for your total load would be the ticket.
Randen