To create holes, use a brace and bit to drill through the flooring, and then a keyhole saw to widen the entrance. Make sure that the holes are not exactly above a floor joist when you drill them. In fact, the joists & studying must be spared as much as possible while installing the water heater equipment.
Many homes that have stucco as an exterior coating have cracking issues, but most of them can be repaired quite easily. There are different kind of cracks that appear and knowing how to go about fixing them is half the battle.