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4" pvc waste pipe is cheap and strong. You should definitely insulate the pipes so the heat in the hot line doesn't transfer to the cold pipe. 4"pipe will allow for the installation. Where the pipe breaches the foundation wall you need to seal it with hydrolic cement and even a rubberized membrane over that. Don't use spray foam. Make a good clean hole if possible with a core bit. Excavate a good foot or two under the hole and laod the area with 3/4 cush grave to allow water to drop away from the wall. There is almost no such thing as overkill when dealing with concrete and excavation.