We have a 12 gallon electric water heater (placed in the utility room of the house), and while it does get the full 12 gallons of water burning hot, if we run it just for a certain period of time, it of course does not get that hot, and you could potentially feed the water just via one line to the bathroom and not have water coming out of the faucet that's too hot. This might take a bit of controlling, but if we don't need a lot of hot water, we do this occasionally.
Best to control the water temp inside the tank by using the thermostat is there is one. Warm water sitting in the tank will encourage the growth of bacteria. Since we all sing in the shower, it's easy for these beasties to get ingested accidentally. Water in the tank needs to reach at least 160 F and stay at that temp for a period of time that is a function of the tanks volume to kill anything that's living in there.
For a small tank, where the entire volume of water is replaced in short order, you can apply power an hour before everyone showers and for an hour after everyone is done. If at some point throughout the day you use all the hot water, a tank of that size needs to come on for another hour to make safe the new water from those super clean Tinacos/Cisternas.