It there a point in the story where the hero is held up as an ideal or where the hero is worshipped as a god?

I don't think Santiago is held up as a God but he certainly is a hero. The Alchemist is essentially a story about the hero's journey. Santiago is his own hero but becomes a metaphor for all of us. We all have a purpose in our lives but, like Santiago, we are often too afraid to go looking for it. Santiago finally does accept his calling to explore his own destiny and for that, he is heroic.