Wiki says it’s a spell that hits with fire damage.
So increased spell damage, elemental damage, fire damage work additively with same effectiveness.
Melee damage doesn’t work, fire or not.
Base spell damage, however, is a different beast. It multiplies your spell’s base damage, so effectively works as multiplier. Doesn’t matter how much increased damage you already have, a wand with +100% base spell damage will double your damage with all spells (provided you don’t have other items that boost base spell damage; there are armors and amulets that have small amounts in their base stats).
That said, you have to somehow balance your build’s overall damage output. Scepters usually have some melee damage combined with medium amounts of base spell damage; wands have best base spell damage, but don’t have any melee damage iirc.