yes it is a heater, there's also one in the sump. You are correct at saying bubbles are bad for corals. They trap air next to their tissue instead of water...
I have added a blue backround since these pictures have been taken. I've also got my glass tops in place and added a cleaner shrimp, a pink spotted shrimp goby, and some nassarius snails.
My next plans are for the skimmer, a closed loop system to get the powerheads out of the tank, and some more live stock.