What does labeling do ! Does that have to do with thickness?
Yes, their are three grades
M is the thinnest. It's used for heating and other closed systems which don't have much oxygen in them.
L is a bit thicker. This is used for potable water.
K is the thickest and typically only used under ground.
If the recirculating pump is causing all these problems turn it off. You have to wait a few seconds for your hot water but other than that your problem should be solved. Also you said you used pex to replace some of the copper? Check with the manufacturer of the pex to be sure it's approved for use on re-circulating lines.