The humble apostrophe is one of the most misused and misunderstood grammatical markers of the 21st Century. As far as the English lanuguage is concerned, there are but three basic uses for it: as a possesive, as a contractive and as marker in non English surnames for characters that either don't exist of other devices.
1. As a Possessive:
This should be fairly straight forward, though there are exceptions. A possessive is when something owns something else. The rule in this case for the singular is to simply add 's at the the end as in "The cat's food". If for instance the food was owned by multiple cats, then it would be rendered at the end of the plural "The cats' food" - same food, but owned by more than one cat.
The mild exception to this is when the thing which does the owning ends in S. If Rees happens to own the cat then Rees' Cat or Rees's Cat are both acceptable.
There are a few cases for this in real life. St James' Park where Newcastle United play or Lord's Cricket Ground in London are both possessive cases but increasingly proper names like Woolworths and David Jones omit the possessive apostrophe for reasons of nicety.
The exception to this is when the possessive is already an indefinate article such as yours, hers and theirs.
2. As a contraction:
These are again obvious. This is when two words are mashed together in common usage. Most commonly is the n't variant which means "not" as in didn't, shouldn't and couldn't. Other variants include I'll and it's.
"It's" is an interesting case. Its is an indefinate article as a possessive and so does not need an apostrophe but it's is a contraction for it is. "It's its head" is one of those rather quaint clauses where seemingly a word is repeated but on reflection is merely the operation of a contraction.
The other commonly seen use is in a term like the '70s where the 19 has been dropped.
Names like O'Reilly, M'Gregor, du'Pree and D'Angelis are all cases where a contraction is made from a foreign language. Ahah you say, but O'Reilly and M'Gregor are already English words! Ahah I say, they're Irish Gaelic and Scottish Gaelic respectively.
So then Jimmy, in review, the line in that song:
From the heavens mercy streams
As it stands it says that there are multiple heavens or that they are vast in number. Sort of, kind of maybe? Well this is one of those archaic uses of English that still exists where the singular and the plural are either interchangeable or are the same word. A similar case exists for sheep and deer.
To add the apostrophe is thus:
From the heaven's mercy streams
Does this imply that something comes from heaven's streams? Although plausible it's not likely.
There are two other cases that warrant investigation.
Strictly speaking, this is a contraction and in Shakespeare's day was written as fort'night. Like the now unused se'nnight which meant seven night, a fort'night then as now means a fourteen night period.
Hear'Say were the winners of the British series of Popstars in 2001. The reason why this apostrophe hangs in the air waiting to be explained in the group's name was for a while open to conjecture. Some commentators said it was a deliberate attempt to appeal to a youthful audience by imitating an informal, uneducated style, while others suggested it was simply a case of bad grammar on the part of its creator.
I happen to agree with the author Lynn Truss who argues that "the naming of Hear’Say in 2001 was a significant milestone on the road to punctuation anarchy."
So please learn how to use this piece of gramar. Don't look like a pratt!