I think he was trying to show Sheryl how skillful he is at flying, tying back into their conversation about how her past words of encouragement for him and Ranka have helped them.
But, yeah, a lot of facepalming going on at my home, about how mixed a signal that was. Trying to show one girl how much her words meant to you, by flying an arrow through a heart at the *other* girls concert. Geeze, blockhead.
Good that Michael finally hit him with the clue-by-four and gave him the cluephone. Let´s see what comes of it next week ( prediction: Not much, Vajra attack and Leons coup delay anything substantial ).
About Sheryls and Altos embrace, either she confessed ( eh, not so likely ) or she told him about her condition ( more likely ). We will probably get a short flashback to it at the beginning of next episode, before the poo hits the fan.