The ability "spell blending", as written, I'm confused what it is supposed to do. Am I to understand that this ability allows the magus to learn a sor/wiz spell that is NOT on the normal Magus spell list?
Indeed. Take a look at some of the better buff spells you've missed out on from the sorcerer / wizard spell list, or any touch spells that you didn't have access to. Heroism and Greater Heroism are gems.