I guess I'm also a little confused, too. The "alcove" is open and has no door where the existing tank sits, right? Is it visible and not in a closed, confined space? You kinda give the impression that it may be in a closed, built-in space, so some clarity is needed as John and I had the same impression. Your question is "can a regular water heater be installed?" and it seems that you already have a regular water heater in place, so what doubts are you having that a matching replacement cannot be installed?
I think that there is also some confusion about the type structure you live in. You say it's a modular home, but also state that it is clearly not mobile. A modular home is not a mobile home. It is simply a house that was made from complete prefabricated sections and put together like building blocks. It has never been mobile and is treated just as a normal house would be.