(Rule book p.17) "In order to cast a spell or make a ranged attack
against a target, you must have a clear “line of sight"
(priest card) "as a quick spell the priestess may remove one condition market from a friendly creature up to 1 zone away"
target is a friendly creature, so that creature must be up to 1 zone away and in order to cast a spell on that target you must have line of sight.
this does not mention that it is a holy spell or what type of spell it was. you may think it is a holy incantation like purify, but as the card does not state that it can't be treated as one. this also means that effects like nullify will not be forced to reveal when you use your restore on a creature.
Short Answers
LOS: yes you need it
Holy: No
Divine Reward: No