I know people love to hate the Arcane heroes, and given different tech I would probably make the mechanic a little different such as disabling buffs rather than requiring re-toggling, but overall I think they were a reasonable addition to the game and serve their purpose well.
Healers are working exactly as intended. What you describe is a plus, not a minus. Target priority matters.
The penalty in the Shattered Realm is fine as is. Dying costs you time, which costs you loot chests if you miss the timer.
There is never going to be a balance between SC and HC play because they simply have different priorities. SC players can afford to be more reckless. HC players prioritize stability/predictability. This is not a bad thing, but expecting this predictability from a game mode specifically created to be unpredictable is just not going to happen. At the same time, there is a reason SR achievements stop at Shard 25 and the unique armor stops at 60.