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As you hit a mob, a stack of NW will start building up from 1-10.
The healing part: NW doest NOT buff BF in any way. NW is simply an aditional healing effect, shown in your combatlog as "Nature's Wrath heals you for XXX". With 1 NW up the heal effect is quite small, but with 10 stacks the heal is quite significant. The 1950% increase is correct. If 1 stack heals you for 10, then 10 stacks will heal you for 195.
Why is NW good for its purpose? Because you dont get the initial heal from BF if the HoT effect from it is allready active. In other words, there is no point spamming BF if you havent put any NW up. NW is triggered by casting BF. You can in a way say that NW replace the initial heal of BF and enhance it. @ lvl 45, the initial heal from BF healed me for 99, while 10 stacks of NW healed me for 130-140. However, if the BF is not up, you get both the NW heal and the initial heal from BF.
The damage part: The part that states "X % increase to damage or healing" is actually a generic term. The same sentence can be seen on other damage dealing buffs, without any heal effect. It is a simple generic term, describing the effect of the buff, with pretty much the following meaning: "This buff will increase output, be it damage or heal, of the feat/combo/spell stated on the next line, under 'affects'."