Since the oil-fired heating system is pressurized and the Carolina Water Stove is non-pressurized then a plate exchanger would be needed and usually installed at or near the oil fired boiler. For domestic water, given your situation, I would think it would be an economic advantage to set up a Side-Arm Heat exchanger on the side of your water heater, unless you have domestic water coil in your oil-fired boiler, then you would get your domestic water by default. By Central Boilers specs, you would actually plum through the side-arm first and then through the plate exchanger and back to the Carolina stove in one loop saving you from running 2 sets of pex lines. If you check out their web site they have some interesting diagrams showing different install types and wiring diagrams too. Worth looking at. I soak in any information I can find on the subject.
With regard to smoke in your garage, it could be a real problem. Maybe not, you did say it was an indoor rated stove. I have two OWB's inside a shelter. They are both gassifiers, one with a bypass damper to allow smoke up the chimney when the door was open and the other without bypass damper, but the unit has to be running with the door open. In both cases the ventilation system was a must and I need to upgrade to a bigger exhaust fan.
Good luck. Hope this helps some.