The water warms up a little bit but even set on max it does not get warmer

It sounds like the thermostat that operated gas valve is failing or the gas valve is bad. This is a repair left to professionals. Now I would price a new heater and install it myself. Repairing older heater is not a good idea, the rest of the heater is old and will fail.

If the motor is getting warm I would suggest replacing the Cartridge assuming all the air is out.

It is the shower head or plumbing that has a built in mixer or reducer.

The problem is not the water heater. The shower has a mixer or a limiter built into the plumbing so that the water wont get hot. It is a safety feature to prevent burns and protect children from scalding.

1) Copy following links for troubleshoot resources:
http://waterheatertimer.org/How-to-replace-TP-valve.html
http://waterheatertimer.org/pdf/How-to-replace-water-heater-gas-valve.pdf

2) Problem indicates bad gas control valve thermostat.
The dial located on gas control, is part of the thermostat on gas water heater. Copper probe protrudes into water heater, and this probe contains the ECO energy cut off and thermostat. Thermostats get out of calibration, or they fail. Replacement should be done by experienced person, otherwise it is relatively simple using pdf link above.

If you need further help, I’m available over the phone at https://www.6ya.com/expert/gene_9f0ef4df2f9897e7

For electric tank: Push in the reset button located on upper thermostat.
http://waterheatertimer.org/How-to-troubleshoot-electric-water-heater.html

For gas tank, then more specific information might be needed for example if unit has power vent, when was the air intake cleaned, is the pilot lit, what brand and model number etc etc..
http://waterheatertimer.org/How-to-troubleshoot-gas-water-heater.html

For tankless, or solar, or hybrid electric, gas boiler, or indirect, or RV heater, etc then please include brand, and model that appears on label on side of unit.

If you need further help, I’m available over the phone at https://www.6ya.com/expert/gene_9f0ef4df2f9897e7

It sounds like your thermostat on the water heater isn't working properly. try turning it up higher and if this doesn't work I would have a service techy look at it.

These Tankless water heaters attempt to heat water as it quickly travels through a short series of heated copper pipes. A high volume of water at an accelerated speed has little time to heat up as it passes through its heating source. You can turn up the temperature (which you undoubtably tried) and turn the water volume all the way down. These settings will produce the hottest temperature capable of the unit - given the entry temperature of your water source.
Most underground water enters at app 52 degrees - and becomes even colder due to ambient temperatures. Difficult to raise this temperature 60-70 degrees in a few seconds of heating.
I've routed a series of copper pipes adjesent to the home heating system in an attempt to pre-heat incomming water. It's only a few degrees warmer, but results a 20- 30 degree hotter delivery.
I have installed some top end units that simply delivers Hot water without compermise.

You can eliminate the shower control knob possibility by turning on your hot water anywhere else in the house. If you get hot water in other places, then it could be the knob causing it. A substantial lime buildup in the tank can also cause poor heat transfer from the elements to the water.

You are correct, the pipes have been used and they retain the warmer temp and thus they don't cool the water by the time it gets to the faucet.