Some balloons use 43 lb (10gallon) aluminum tanks. Othes use 15 gallon vertical stainless steel tanks. My wife flies with three 10 gallon aluminum tanks. My balloon has a horizontal stainless tank of 20 gallons.
Our tanks have a foam insulated cover that helps retain heat, or cold, and protects knees from bumps. I actually saw a tank, wrapped with a tank heater that had scorch marks from a short in the wiring. This was particularly bad as the tank was aluminum, a material that loses much of its tensile strength with a small rise in metal temperature.
I think the concept of a ducted heater, using forced air through a tube to a remote basket has merit. Maintaining positive pressure makes it difficult for a propane leak to flow up the duct to the fan/heater. If the fan is placed above the basket it would be unlikely to experience gas in a propane leak, as propane gas is heavier than air, especially at low temperatures.
I feel better if the source of heat is below the ignition temperature for propane, say below 700 degrees F. That probably means a heating unit contained in some type of liquid, like the oil bath heaters I mentioned above.