The upstairs bathroom is equipped with a glass water tank, and the water pipe is constantly drained

No, it won't. Glass water does not affect health.

If the bathroom is large enough, it can be installed, and the sewer pipe needs to be changed again.

If the space is the right size, it is possible. However, in the process of transformation, the ground needs to be raised, and if the position of the squatting pit drain is too far from the original toilet drainage, it may lead to the problem of poor sewage discharge in the squatting pit.

Not good, one is enough. It's a mess of squatting and sitting, it's too ugly.

In your current situation, it is no problem to connect the solar water heater and make a bathroom partition, but to move the washbasin, because there is no ready-made sewer, you have to break the floor tiles and connect a drain pipe.