Anyone know a good healing item for battle? I only have 1 mil to spend.

i don't know what your pet's stats are, but Malevolent Grimfruit and Rreign Mace of Malice are the best healers for under 1mil for pets under 300 health

What about potions? Are there any potions I can use in battle to heal?

Revivifying Pylonic heals 100 hp. You can only equip one at a time.