All Children Touched Function Not Working?

Your line 21 is not included in the check that child:IsA("BasePart"); so you have a Script which is a child, but Script objects do not have a Touched property.

Move line 21 into the condition to make sure it is a BasePart, ensuring it has a Touched property.

You should really retab your code, too.

for i, child in pairs (script.Parent:GetChildren()) do
    if child:IsA("BasePart") then -- consider only the Parts of the model    
        function onTouch(hit)
            local human = hit.Parent:findFirstChild("Humanoid")
            if (human ~= nil) then
                while (human ~= nil) do
                    local s = wait(1)
                    local health = human.Health
                    if health > 0 and health < human.MaxHealth then
                        local newHealthDelta = 0.01 * s * human.MaxHealth
                        health = health + newHealthDelta
                        human.Health = math.min(health,human.MaxHealth)
                    end
                end
                if human.Health > human.MaxHealth then
                    human.Health = human.MaxHealth
                end
            end
        end
        connection = child.Touched:connect(onTouch)
    end
end

Note that the assignment to connection (on your line 21, my line 20) is redundant since it would be overridden repeatedly by the loop. Since you aren't using it, you shouldn't include it in your code - it could be confusing.

Like in good writing, every element of a script should have a clear purpose.