I cannot help you with the "are you crazy for doing this", but a couple of things to keep in mind, i do not know if these apply but something to verify for you. Not all propane appliances will relite the pilot by themselves, so if you have a power flicker and the thermocoupler loses power it will allow the pilot to go out and then will need to be manually restarted.
Do you have a way to access the sealed space for the water lines that you closed in? The reason I ask is you will want to be able to check that your heat tape is not affecting the insulation by being in direct contact with it. Not all heat tapes are rated for IC installation. Again you may have verified this already.
I would also recommend that you set your heat slightly higher than 40 degrees, say 45, that way you will have enough reserve time to get out and get the generator running. The overall temp within the home will not drop fast as the insulation will hold that heat and the extra degrees really make a difference, especially if you are exposed to wind. That brings up another item that the overall exterior and interior temperature is not your biggest concern, it is a pin sized air hole to the exterior inline or near a water pipe that will cause it to freeze. We have repaired more than a few cases that the heat or hot water line froze even though the water in the line was hot, just not circulating. It is like a jet of air just blasting that one spot.
Hopefully all these things work out and you get to enjoy the house this winter and safe riding.
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