Or just active control? Set a desired output water temp, and let a computer constantly fiddle with the valves slightly to keep the output constant. Monitoring the current temp of the input lines would help but not be necessary.
I mostly don't like that every few minutes, I have to turn down the cold water a smidge, as fresher colder water from the ground comes up through the pipe. My shower has two valves for hot and cold separate, so I turn the hot water all the way on, then add just enough cold water to achieve human shower temps at full pressure.
You don't need a computer, or even electricity. Thermostatic shower valves are 100% mechanical, and work beautifully. There are models available that will automatically compensate for both temperature and pressure changes, keeping the output temperature constant.
Interestingly, control valves employed in this way tend to wear out very quickly or else they are slow and expensive so that they can be made more durable. Anybody working on this needs to hit that "good, fast and cheap" triple point.
This is why wax motors are commonly used as valve actuators since the only calibrations are the wax mixture, the mechanical force applicator, and the thermal resistance of various components in contact with each other
Another approach is to go to the other end where you've got the tank running higher than is safe to safely touch (e.g. scalding) put put thermostatic valves on all sinks and showers. This way you can run the water heater at 140° then then use more cold water to reduce it to the proper temperature which is a slightly easier problem than running your water heater at 120° and then cooling it down to 105° which gets to "mostly hot water with cold water for pressure". Running a tank at 140° also inhibits bacterial growth (e.g. legionella)
Not enough for a shower, but for a sink you could look at an under sink water heater ( https://www.homedepot.com/p/Bosch-2-5-Gal-Electric-Point-of-... ) - but you're looking at 6.8 GPH recovery time rather than a 2.5 GPM flow rate. The main advantage there is that you don't have move the hot water from the water heater in the basement all the way to a sink (lots of hot water in the pipe that then gets wasted) and thus less water use to get hot water to the sink and less hot water use overall.
An under the sink tankless looks like https://www.homedepot.com/p/Rheem-Performance-6-kW-1-0-GPM-P... with 0.5 GPM for a 65°F raise (you wouldn't even need to run hot water to that sink - this is what I do for my upstairs bathroom since the water heater is so far away that you need to run the water for a very long time to get the sink up to 'wash with hot water' levels).
