The Chucky in this movie is not the one from Child's Play 3, but a destroyed clone created either by regeneration at the Good Guy factory or the rite that Chucky would later make use of in Cult of Chucky.
What else could explain the fact that it doesn't have the section of its face sliced off as it was in the previous movie?- Tiffany clearly cannibalizes several dolls to reconstruct Chucky at the beginning, and some of the suture lines on his face line up with the section of his face that was cut off.
The reason Chucky needs the Heart of Damballa to transfer his soul this time is because the first person he revealed his true identity to is Tiffany
Even before Tiffany died, her knowing his true identity before he told her may have made her exempt from being a possession target. By having the Heart of Damballa, Chucky can bypass the name rule and swap his soul at will. Tiffany could theoretically still transfer her soul by telling someone, but she's unaware if such a case exists, and Chucky of course won't tell her due to needing her help.- It also seems to bypass the time limit rule, as in the sequel, Chucky and Tiffany seem to be in no rush to actually perform the ritual, even with having to wait for Jennifer to give birth.
The Heart of Damballa never came up until this film, because he didn't know where it was.
In the first three films, he could've used the Heart to transfer at will to whoever he wanted, but he probably figured his body was either cremated, or at least still in a police morgue, somewhere he couldn't get to easily, if at all, he then finds out in this film, that his body was buried, so he knows where it is, meaning he doesn't have to spare the first person he revealed himself to.