Double tap an item then select a character and it will be used on them! HP and MP restores animate with numbers floating above the character portrait.
The game stores a list of all types of items and how many the player has. The inventory just won’t show them in the list if their count is zero. I’m thinking the maximum of each item will be nine or fifteen. Maybe variable! Resource management is a beautiful thing but 99 Potions isn’t something interesting to manage.