Teaching your dog the heel command allows you and your dog to walk together without any pulling. No! Your dog does not always have to be in the heel command when walking. However having a clear understanding of what it is used for and why can help you teach it and not be pulled all over by your dog.
Teaching the heel position to your dog can be looked at as home base for your dog. When you teach your dog good things come from the heel position they will want to gravitate to that position. This is why teaching the heel command to your dog is a good practice because it gives your dog a clear position. By teaching the heel this way you do not have to worry what your dog is doing because they desire to be by your side!