What would cause the dielectric union at the water heater to rust. It is an electric water heater with copper piping.

The union is made of brass and steel. The steel, of course, will rust if its exposed to water. You might have a tiny leak or maybe the humidity is making it rust.

Dielectric unions are used to prevent dissimilar metals from coming in contact with one another. When 2 different metals are in contact one or both may corrode, sometimes severely. In your case the steel tank is isolated from the copper pipe by a di-electric union. This union will have a gasket in it which may be leaking, causing rust on the steel side. I would replace it with a di-electric nipple and add a copper/brass union in the line. The nipple will have no gasket and are less prone to leaks.