The Goetic Art of Ablation is primarily used against demons by Infernalists.
It is stated to always be an infernal power. However the dice pool is:
Ablation Total = stress die + Stamina + Ablating + (Realm Lore) + aura + (Penetration x Penetration Multiplier)
I assume that the Realm lore is the realm of the spirit you are attempting to Ablate.
So if you wanted to Ablate a faerie spirit you would need Faerie Lore.
I also assume that the Aura modifier is always with the infernal modifiers. (e.g. if you're ablating a Faerie in a Faerie Aura of 4 with an infernal power it would be -4 to the effect,)
Would ablation work on corporeal Faerie or magical creatures?
I am picturing a Witch Hammer hunting down and ablating what they consider to be "familiars" for the power.
Yes, by analogy with the Summoning (presented immediately before Ablating) Total formula, which is almost identical to the Ablating Total formula and whose (Realm) Lore seems to be that of the affected spirit:
The ... Total .. also incorporates his knowledge of the spirit’s supernatural realm.
Well, the (Realm) Lore would be Faerie Lore. It's unclear if you'd strictly need at least 1xp in Faerie Lore, or if you could just treat it as zero in the formula otherwise. But since it takes just 4xp to cover all 4 Reams frankly this seems a very minor issue. That said I'd probably rule no Faerie Lore xp are strictly required. The reason is that otherwise it seems sensible to rule that Penetration xp would be required too (Penetration is another Ability in the formula), and that would feel a strange exception to the usual rules for Supernatural Abilities.
Ablation is always an Infernal power, so in general yes, that's the modifier that Auras impose on Infernal powers. However, there are some Virtues that allow you to treat "foreign" Auras as friendly or at least non-hostile (my favourite is Dark Magic from F&F p.29). If you allow those to apply to a Sorcerer's Goetic Arts, then Ablation may be treated as a non-Infernal in terms of Aura Interaction.
Ablation works on spirits. However, some spirits have the ability to take material forms; Ablation would work on those too, but not on - say - your average Magical Cat.
Note that nothing prevents you from either creating a version of Ablation that only works on a suitably restricted set of supernatural creatures rather than on spirits; or from creating an additional Supernatural Virtue that extends the power of Ablation to encompass other sets of supernatural creatures!