Does Leafy heal the team?

The big heal is Leafy's ultimate, Lotus Bloom. It creates a lotus cocoon that instantly heals the entire team for 15% of Leafy's maximum HP, and it also gives the whole team a 15% Grass elemental damage boost. So one button covers both recovery and damage.

The turf circle's heal is small, and it is there to keep the team topped up between ultimates. It will not save anyone from a big hit. Vitality Blooms have a catch: they heal only Grass-type teammates standing inside the area. If you bring a non-Grass Aniimo, or your team spreads out, those heals miss.

Leafy is a Grass boss Aniimo, and as a support it is built around regeneration and healing. On a Grass team it is a top-priority teammate for Irisalis, bringing both Grass support and EP support.

Leafy or Melobloom for healing

Melobloom heals too, but only on a trigger. When her rose mark blooms after a target takes three critical hits, all nearby allies are healed for 5% of her HP. Her real job is elsewhere. She cleanses debuffs and negative status effects from the whole team, and her ultimate, Rose Garden, gives allies inside her circle a 70% increase to Grass critical damage for 30 seconds.

In practice Leafy is the dependable team heal and Melobloom is the cleanse and crit amplifier. A Grass team built around Irisalis can run both, since they cover different needs.

Grass teams are relatively weak right now and are expected to improve once Iris Solace is available. That affects how much Leafy's healing can carry a team, not whether the healing works.