Tidal heating can and does occur in our solar system, mainly with small planetary bodies such as the moons of the gas giant planets, particularly Jupiter, and to a far less extend even with the earth-moon system. It’s actually the sole explanation for why there is volcanism on Jupiter moons Io and Europa. However, in that case you have a massive planet like Jupiter with its enormous gravitational field pulling on and contorting the surfaces of comparatively tiny moons.
On the other hand, with the earth-moon system, the gravitational interactions are comparatively weak, resulting in some heat generation and the creation of the tides. The primary source for the interior heat of the earth has long since known to be radioactivity from heavy elements deep in the interior.
Concerning tidal heating, there are a number of factors which affect the amount of heat generated, some factors more important than the gravitational forces involved even. Rotational speed and interior compositions are at the top of the list. The moons of Jupiter are indeed good examples of this variance.