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Natsu’s Fire was better than the first aid kit they brought when Macao was dying as it was stated the med kit would be ineffective in saving his life yet Natsu’s Fire wasOne of the demon's in the galuna island arc implied that demons can regenerate, he got lethally shanked but recovered coz demon iirc.
Though I wouldn't give natsu regeneration since all other instances for regen have been backed up by statements or been shown happening.
If anything it's plot armour that natsu survives such damage; just look at the stuff gajeel, Gray, laxus and gildartz have survived for stupid reasons or no explanation at all.
Cauterisation is basically just melting flesh together to prevent blood loss: I would call it first aid rather than regeneration.
so that’s why cauterization would fit more of low level healing