I think your second point is probably why they set the lower limit on flow rate. I suspect that the heat exchanger could handle much lower flow rates but you run the risk of scalding water comming out of the returns. Although not quite the same, tankless water heaters work at very low flow rates, < 6 GPM. If the flow rate dropped to 10 GPM on a 400k BTU heater, the delta T would be close to 64 degrees! On top of 80 degree water would present a significant hazard.