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The most comfortable setting of the water heater is about 120 F. In most of the heaters, it is set as a pre-setting by the manufacturer for new water heater installations.
If your water heater is losing water, it could be because of a crack in the internal tank or one of the pipe fittings can be loose. Leaks from a known source can be repaired whereas a widespread leaking problem may need replacement of the whole system.
You can start by installing a low-flow shower head. To run your water heater efficiently, you can schedule water heating maintenance that helps to remove sediment buildup and provide effective heating.