There probably is an Oracle or magic spell to find the hero, it's a common fantasy trope and given this world runs on what your class is, deciphering class is very important. As for the priestess, I'm really questioning why her first instinct was to report on the man who saved her, but other than that, the mistake of Monster Tamer = Demon Lord is not her fault but of the nation's history. The nation believed the ancient monster tamer that protected the elves was the Demon Lord after the ancient tamer fucked up their nation. It does make sense that the demon lord and the monster tamer are confused as the Demon Lord makes monsters and the Tamer tames. To outsiders, all they see for both is "controlling monsters"