I have a question about this card. My understanding of the card is that I can use outlands characters from any sphere. A friend brought IP the issue of needing a resource match. But in my outlands deck I have no lore resourced icon but I use the more outlands character. Is that being played incorrectly? Do I need to give a hero the resource icon for lore before legally playing it?

You're right, your friend is mistaken. Hirluin can pay for any Outlands character without a sphere match, the same way Elrond can pay for allies from other spheres. It's just an ability of theirs.