To heal in Tales of Arise, you will need to use consumable items such as life potions and apple gel. Doing so will allow you to replenish hp after battles.
You can also use items during battles and rely on the skills of certain companions, such as Shionne and Dohalim. Your companions will usually use their healing skills through healing artes automatically.
Still, if they are not, you can always set the party strategy to focus on healing. Doing so will have your companions automatically use their healing skills.
Using healing artes will also drain CP, which is also required for your other special combat abilities. You can restore CP by using items and resting in the game at campsites, so it's always a good idea to rest up if you see a camp while low on CP.
You can also restore CP during battle and outside of it, just like with items. When in battle, just open the battle menu and select either a healing item or CP item to replenish what you need.
There's also a way to auto-heal right in the main inventory menu. In short open, the menu up, and you should see a button to heal automatically. Using this auto option will use CP to restore your health and can be done by pressing either Y, G or Triangle.
Check out some of our other Tales of Arise guides!