Holy Bolt is the only direct-heal spell in the entire game. This could in theory make the Paladin viable as a party healer, but as the difficulty increases, this skill suffers. The healing amount simply doesn't scale well enough with the hp development of characters and damage output of monster. Any party probably has much more power and survivability is the paladin, instead of healing party members, fights himself and provides offensive auras and skills.
As an attack skill, it also has limited use. While it ignores magic resist of the undead, it is extremely limiting in that it only can damage undead. That, and Blessed Hammer is a much more powerful alternative.
The Paladin can learn to summon bolts formed of pure, righteous energies. These projectiles are vessels of life, bane to the undead, and succor to the faithful. At the battle of Taelohn Bridge, the villagers feared the day was lost when an army of the walking dead besieged them. Just as the battered militia was about to be overwhelmed, a small band of Paladins appeared. Wading through the rotting carcasses of the living dead and hurling spheres of pure Light that expelled the evil controlling the battling corpses while renewing the strength of the remaining villagers.
↑Diablo II Manual, page 78. Blizzard Entertainment, 2000.