Call their customer service. As I understang them, you're supposed to lower the temp adjustment until they are not boiling water, which causes the dripping, etc.

You have a vented faucet. As the water heats up, the faucet will drip. This is normal and necessary if you would like to prevent damage to the tank. Sputtering and steaming are an indication that the temp may be set too high.

The reason your water temperature is low, despite the fact that you have sputtering and steaming, is that as hot water is used it is replaced with chilled water, which fairly rapidly lowers the temperature due to the small tank size. That's just the way it is if you want both chilled and hot water from the same faucet.