The short answer to your original question, which was:
"Is it feasible to extend service this far to pick up so few customers?" is:
It is possible but very expensive and will require the review and approval of many regulatory agencies including probably; your State Health Department, the City, possibly the EPA, and perhaps others. This is what an old boss of mine used to call a "spaghetti system"; miles and miles of small lines serving widely separated homes and providing little or no storage for emergencies. Very expensive and very unreliable. Also, such systems are often underfunded even with high water rates.
Just to begin, because the City has no master plan you, and they, have no guidance as to the line sizes needed. The City will, I think, view this as a highly undesirable main extension and would not likely willingly approve it. Also the City will be even more worried than you are about maintaining water quality at the end of this long, dead end main.
Because the highest home to be served is some 39 feet above the end of the City main water will have to be pumped. If the City decides that a tank or reservoir is needed that pump station will probably have to have at least two pumps, each capable of pumping the maximum day demand to the tank. An emergency generator may also be required at the pump station.
The tank will probably have to be sized to provide storage for the difference between the max day demand and the peak hour demand PLUS enough water to supply these homes for the duration of any anticipated power outage or other interruption of service. At a minimum, my best guess would be a couple thousand gallons.
The tank will probably also have to have an overflow elevation at least 92 to 100 feet above the highest house to provide at least 40 psi even when the tank level is low. For health reasons, an absolute minimum pressure of 20 psi is required in some States. Given your "relatively flat" topography this will be an elevated tank.
As Coloeng points out, it will be difficult to maintain water quality 3 miles from the City system. This could require re-chlorination at the tank or other kinds of disinfection. Frequent flushing will also waste water.
As to the "limited belief" that the area is unlikely to grow, history suggests that once a good water supply is available, whether adequate or not, there will be increased pressure from landowners and developers to build more homes. Everyone wants their 20 acre ranch but few are willing to pay what such sprawl costs. In addition to the water service costs fire protection insurance rates will be high with such a system.
It sounds as though the City may be forced, for public health reasons, to actually provide this water service but they will be very unwilling to undertake the continuing maintenance and public health responsibilities that entails. They will also, it seems likely to me, to be very conservative in their design criteria.
good luck