Discuss Divinity Original Sin, as well as comments posted to our Divinity Original Sin Wiki and Divinity Original Sin 2 Wiki
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Is it a pure damage boost? so it would be worth it on a mage?
No disrespect intended, but if by "mage" you mean "playing with a staff or wands and nothing but magic damage" then playing a mage isn't worth it in the first place because staffs and wands are bad and damage diversity is important. More to the point the idea of "playing a mage" in Divinity is just a pet peeve of mine, because in my opinion any well-developed character is also a mage on top of whatever physical class they happen to be using; but it being a peeve of mine is also you should also not pay much mind to my saltiness. lol
yes, it affect spells.
Provides +10% to all damage per nearby character when cast.

So say you're just around your party of 4, it'd provide +40% damage for 2 turns.
Why would you engage in battle if you're only surrounded by allies? lol Abilities like whirlwind and blitz attack can make it worth the cost
Fairly obviously, you cast the buff to get your +40% (or more if you're also summoner) then use a mobility skill to close distance on the enemy. For fights against small numbers of powerful foes.
Does it stack with summons/totems?
Yes. Summons and totems DO count as "characters" in general and contribute to benefits from spells like Thick of the Fight and Rallying Cry.

Summons/totems can also, being characters, receive any buff a character can receive (ex: Encourage, Peace of Mind, etc).
Craft ?
Never find myself using this, the area is too slow and the skill itself is way too slow to execute.
Overpower is the only SP based warrior skill that i find useful enough
Enrage then Onslaught. Does insane damage.
also counts enemies
Typo in above, not "Arcane stitch".
Alternatively you can acquire Arcane stitch by equipping Sundering Cleaver
Is it an aura or a one time impulse? Will the bonus change over the course of battle if someone runs away or dies?
It's not an aura, but a buff that lasts 2 rounds. For the duration of the 2 rounds your damage increased is fixed to the number of people at the time of casting. If people move toward or away from you during that 2 rounds, the buff will stay the same.
Does it works on healing?