Hi, Nate.

Climate varies greatly across the NE, with varying degree and intensity
of summer. During which you (well, at least I) would not want to be
running a steam-boiler, for a bunch of reasons. That makes the
separate water-heater preferable.

Which one, which fuel, would depend on factors invisible from here. An
oil-burner is going to cost much more than a gas-burner, and require
regular service. Your expertise with water and gas piping are a matter
for you and your building inspector, not to mention SO, and her
valuation of safety/peace-of-mind.

As an aside, it would seem that in winter, with a steam-boiler, an
"economizer" (heat-exchanger in the stack) with a loop to the hw
storage tank & a circ-pump that runs with the oil-burner, would be a
Good Thing.

HTH,
John