I'm just not sure what's the heater had to do with water coming back to the spa
Every piece of plumbing adds head loss. Heaters, filters, pipe, fittings, valves and even the spa jet nozzles themselves adds head loss. The more head loss there is in a plumbing system, the less flow rate the pump can produce. For more details, you can read the Hydraulics 101 sticky in my signature.
Spa jets can and do work properly when designed properly. I have a spa with 6 x 3/8" jets which if you look at the table I posted earlier, require about 16 GPM each for a moderate strength. I have a 1 HP full rated pump as my jet pump so it can produce the appropriate flow rate. However, the spa has all 2.5" plumbing NO heater and NO filter in line with the spa jets so a smaller pump works fine in that situation.
Your situation has several factors that prevent good performance. Small pipes, heater, filter and large jets are not a good combination. As I posted earlier, 7/16" jets require 22 GPM in order to provide 15 PSI of pressure strength. This is about 35' of head loss. 6 jets at 22 GPM each is 132 GPM total. In order for the Intelliflo to produce 132 GPM, there needs to be less than 60' of total head. Since the spa jets require 35' of head, that leaves only 25' for everything else. At 132 GPM, a typical heater will have 35' of head so already too much head loss. That is the problem.
Now to the solution(s).
1) Reduce the amount of flow rate each jet needs. This can be done by reducing the jet size orifice
2) Eliminate the heater and filter from the plumbing loop. A bypass can be used for this.
3) Up size the piping.
You can do one of all of these things but it makes more sense to start with cheaper options first. So I would try each of these things in succession.
However, given you are only seeing about 40 GPM which means you have a bigger problem than I originally thought and you may need to do all of the above.
What I really need from you is a more detailed description of your setup but the DETAILS are very important if you want this to work. So please post the answer to these questions.
Make/Mode of the filter and heater
~ Length of suction and return pipes
Picture of your pad equipment
Also, did you find a part# on the jets? Are you sure the current jets are waterway jets?
Have you tried flushing the jet return lines? Remove exterior fittings plus all jet nozzles and then run the pump to flush the lines.
As for the function of a jet nozzle, water velocity is related to the diameter of the nozzle. The smaller the diameter, the higher the water velocity. The higher the water velocity, the more momentum that is stored in the water stream and the harder the water will hit your body.
As for your friend, every pool is different, if you can give the exact details of their design, we can compare as why their design works and yours does not.