A stem wall is actually an extension of a foundation. It rises up vertically from the foundation footer to provide a continuation of foundation strength. Sometimes, stem walls can help adjust height if the house is being built on sloping ground. In wet climates, stem walls often are used to help keep floods from damaging the house itself. These walls are made out of concrete, just like the foundation, and can either be stacked or poured.
A stem wall by nature needs to meet the foundation, both the framed walls of the house and the concrete foundation on which it rests. There is no other way for a stem wall to work properly. If it does not look like the stem wall is meeting your foundation properly, framing walls or beams may be hiding the point of contact. Stem walls support the weight of the house, so they are meeting the foundation at some point. But this point of contact can develop problems of its own.
Stem walls are not immune to problems. They must be constructed out of very strong concrete without any curing issues since a large portion of the weight of the house rests on them. Rebar is typically used to provide extra strength for the project. Local codes may have flood or seismic reinforcement requirements that stem walls do not meet. Stem walls can develop cracks and corrosion problems that keep them from working correctly.
If gaps do occur in stem walls, the problem may be with the house itself. Over time, posts and beams may have warped. For manufactured or mobile homes, stem walls may not match the foundation of the house itself, and without any structural attachment between the two, gaps or cracks may occur. This often can be solved with remodeling, clamps and other devices.