I would use 3 elements on 3 separate runs of #12 romex, directly to the generator reconnect lugs, without any extra hardware in the middle. That will be over the units rated capacity and sufficient for a test.
I would wire it up, keep bare wire insulated or stay away from it, ground the genset as you described, then fire it up, warm it up, and close the generator breaker. If it can't take it, immediately open the breaker. Then pull one lead off one element and let it hang out there for the test (it will be a live wire, as will the unconnected terminal on the element, so probably safer to remove that elements wire or just run two elements).
Start it back up, close the breaker, and go get a few tea leaves for the hot water you're making.
For safety, I would not walk away from the rig with it running, and make sure you and anyone that may be around (like the buyer) know what the energized metal is. It will be the lugs, which will be under the cover, and the screw terminals on the water heater elements. Everything else should be insulated and touchable, though it reduces risk to not touch anything but the genset controls, and water container to check for heat.
I wouldn't go to a breaker box, because I don't see much purpose to it other than having another on/off switch or maybe a lowered trip point than the generator's breaker. It seems unnecessary to me, there's no code issue requiring it and it adds connection points to complicate and potentially short.
Electricity is rightfully scary, but if you're smart, pay attention, and use ground rods, you should be fine. If it worries you a lot, shut everything down before going near the wiring or terminals.