Just an addition: your first host will be automatically added to your engine so you don't have to do anything special on that.hosted-engine on the other side, is using a dedicated storage domain for the engine VM and you cannot use it for other VMs so you still need to add a second storage domain for regular VMs.
Take care that loopback mounting NFS could lead to deadlocks:
https://lwn.net/Articles/595652/
On a single host with the storage on the same host iSCSI seams more reliable.