If you changed to a known good motherboard and still had this issue i would suspect the new battery. Did the old battery not work at all after the water damage? if it still works i would try with the original one instead.
Probably just a bad camera unit then, send the faulty camera back to the supplier and get a new one. The flash doesn’t work if if the camera is broken so when you get a good camera installed the flash will also work again, unless it’s actually broken of course but that’s not very likely.
Wasn’t the bluetooth homebuttons the first working ones out on the market for iphone7/8? I dont know how reliable they are, try without the home button installed i guess.
Bootloops can be caused by almost anything, for starters try to boot the phone with just battery and display connected. If the phone boots fine that way then keep connecting other parts one by one until it starts bootlooping again to find the faulty part. If this doesn’t work you could either assume it’s motherboard related and needs microsoldering work to get it fixed, also quite expensive but not 600usd expensive. Or you could also try to factory reset the phone to make sure it’s not software related if you dont care about the data on the phone. Also if you’re not experienced in taking phones apart just take it to a third party repair shop instead of apple and let them do the troubleshooting for you, shouldn’t cost that much.
Unfortunately this model isn’t built that way. Display and glass are laminated with OCA glue so a glass only replacement is not possible unless you have refurbishing equipment for it.
Do you still have the old screen at hands? connect the old cracked one again and see if that has the same problem. If the old one works fine you simply got a bad display from your supplier, unless you damaged it during the repair.
You might have torn apart the flex cable on the display for the home button when opening the phone, so i would try with a new display if the flex cable looks bad. If that doens’t fix the issue you might have damaged the home button itself when taking the phone apart. If you put a opening tool between the frame and display on the bottom left side there’s a chance that you got in contact with the home button flex cable and in return damaged the home button.
The reason you use heat is just to make the job easier and prevent cracking the back glass when removing it. But since yours is already broken and are gonna be replaced it doesn’t matter how you do it.
It could be a worse problem than just the display but not very likely. You shouldn’t assume the worst case scenario in this situation. In the vast majority of cases like this it’s just a damaged display.