It is unknown whether she could or couldn't heal him. While she would not have been able to give him back the use of his arm since that part of his soul was sealed away, she might have been able to revert the necrosis (rotting process) that his body was undergoing and stop the constant pain that he was in. However, she could just as easily not as it's possible that the side-effects of the Dead Demon Consuming Seal were irreversible.