just don't see the safety in replacing a element in a place where it had once caught fire.
Correct, the wires leading to the burned element have probably been compromised. If you can replace those wires without replacing the whole water heater, that might be a cost effective solution IF the water heater is less than 6 years old.
If the wire can't be replaced, and the heater's still less than 6 years old, there's a neat thing called a thermostatic mixing valve that you can install at the water heater. This valve lets you safely crank up the thermostat, which gives you more hot water, but without the danger of people getting scalded.
I dunno how much a new 30g electric water heater costs vs a mixing valve, though. It may be more cost effective to just replace the water heater. And if the heater is more than 6 years old, just replace it... unless you have unusually good water quality or have replaced the anode every few years, it's probably about to leak anyway.