And how is the need for it replaced with a daisy chain?
Here you are confusing something: With an adjustable daisy chain you do not need a fifi anymore. Using a standard daisy chain you need a fifi when aiding.
How is the fifi hook used in aid climbing?
First let me describe what a daisy chain and a fifi are:
This is a webbing sling that is sewn together at regular distances. Usually about 2 bar tacks are used, so they are not very strong (about 3kn). Therefore they can break when loaded with e.g. a fall. This is not a problem as long as you clip into just one loop. Never clip in over two loops, then you will disconnect from the sling when the bar tacks in between fail. If correctly attached, the breaking of the bartackes can even reduce the impact absorbing energy.
A fifi is simply a hook that is attached to your harness.
When aiding you have two daisy chains and a fifi attached to your harness. On the ends of the daisy chains is a biner with a ladder each. One of those is set up at the current pro (a nut, cam, ...) and you placing the next pro. When done you clip in the biner on the other daisy chain and step onto the ladder (using both your hands). To get your hands free and get as much reach as possible for the next go, you attach the fifi in a loop of the daisy chain at the desired distance to the pro. This ca of course also be directly the attachment point of the pro, to get as close as possible. Then your load is on one foot in the ladder and on your harness via the daisy and fifi. Now you can push upwards with your foot and the fifi/daisy will provide the pull towards the wall. You reach the next placement and repeat.
What other uses does the fifi hook have?
I am not aware of any outside of aiding.