Can Spark Elf heal the team?

The healing sits on E, so you have to press it yourself; it is not a passive top-up. Spark Elf fills the Support role in combat, and the heal is part of that kit rather than the whole of it.

Where it earns its slot is a fire damage team. It is a valuable support there, so the natural pairing is Spark Elf keeping the team alive while your fire attackers do the damage. Outside a fire lineup you still get the heal, but you lose the reason it stands out.

There are two ways to get one. The Prismana Spark Elf comes free as an egg from the Spark Elf X Aniimo event and hatches in an Outpost Hatchinator. Regular Sparkelves can be caught after you feed Fire Sprout Biscuits to a Bloom, which adds them to that Bloom's spawn table. The event article linked from this page covers both routes in full.

Not settled: How strong the E heal is has no fixed figure yet, so whether Spark Elf is the best healing Aniimo or just a support that also heals is still open.