This spell is incredible. It is easily the best spell in the game. The main reason for this is that it has no maximum range. You can deploy the Bright Wizard right at the back of the deployment zone, and he can rain death and panic on the enemy from there. So in the Urgat Rip Eye battle, it can be used to destroy the four artillery pieces right at the start, and to kill the Shaman on the Wyvern, without ever having to risk any of your troops. And then in the final mission, I used it to destroy the Doomwheel first, then the Grey Seer, then each of the three Rat Ogres, before moving on to each Stormvermin regiment that has a Warpfire thrower. After that, the Wood Elf archers took care of the rest.
In fact, I didn't even bother bringing any of the cannons, mortar, or the Hellblaster for attempting the last two missions! And I got through both of them without taking even one casualty! Just send a Gyrocopter zipping around in front of the rest of your forces. The enemy will chase their tails (literally) trying and failing to catch it while they get nuked with giant flame-meteors and Wood Elf arrows.

This spell is so effective that it is absolutely worth going massively out of your way to try to get it. If you're lucky (like I was on my most recent play-through), it will be the first spell that the Bright Wizard gets on reaching 1,000 experience. If you're unlucky, he will get Burning Head instead, which is a really effective spell, so using that, you should be able to get Luther Flamestrike to 2,000 experience, where hopefully you will get Conflagration of Doom. So to get Luther to 1,000 experience, do the following:

Make do without receiving the Reiksguard Knights from the Emperor. Solo the Guy Gourard/Decoy/Bandit Hideout missions with Luther Flamestike. Use that horse to your advantage - stay mobile, and try to to stay roughly in the centre of the battlefields. That way, if you make a mistake and get charged, there will be plenty of space for him to retreat and rally before he flees off the table. Have him work in conjunction with Allor, who will cast Curse of Anharier (sp?) on one regiment, and Tangling Thorn on another. After that, just blast away with Fireball and Piercing Bolt of Burning, and burn the bandits one by one. If you have plenty of space and time, use Luther to run down and kill any fleeing regiments. Do your best to not let any flee off the battlefield - every single point of experience is vital. Pick up the Armour of Meteoric Iron for Luther while you're at it.

After you've killed every single one of the bandits with Luther, he will have 876 experience. Almost there! Then when you get ambushed by the Skaven in the Grey Mountains (after you get the Celestial Wizard), you will only need Luther to get 124 more experience to get another spell. So have Allor use Tangling Thorn on one of the Skaven regiments (ideally Stormvermin, as they're more dangerous and grant more experience when you kill them). Leave that regiment to last, and when all the others are dead (presumably most having been killed by Marius Uberstorm with that lethal Azure Blades spell), park Luther Flamestrike in front of the trapped regiment and burn them all! If you're lucky, this will give him Conflagration of Doom, and there will be no need to bring any artillery to Extermination. Or any other future missions, for that matter.... If you're unlucky and get Burning Head instead, really go to town on the Skaven in Extermination and Patrol Loren with it, and hopefully you can then have enough experience to level up again.

Enjoy!

I tried leveling up Luther myself, I used Guy Gourard missions for it. He just rode around fireballing the units of bandits to death, which took ages. I think that the Fireball in SoTHR can hit only a single model at a time. After all that time spent on leveling him, he got the Burning Head. I didn't bother to keep gaining more experience for Luther.
I have some experience with this spell in the sequel (Dark Omen), which I have finished earlier this year. The Conflagration is devastating and very useful against tougher undead units, such as Mummies, which are a real pain to deal with even experienced troops. Luther has plenty of missions to accumulate enough experience to have acces to it. I believe it has a limited range this time though.

Playing through Total War: Warhammer II, I wish the magic was more varied, as in SoTHR and DO. I miss the immobilizing spells in each lore of magic ;)