Is there any way to control the POT continuously or "live" (for lack of a better term) rather than send it a specific value once with the SPI transfer line?
Forget the Arduino, for a moment. How would YOU perform the task? You need to adjust the potentiometer based on the sensor reading. To do that, you need to read from the sensor, and write to the potentiometer.
Isn't that what the code does now?
Why do you request 8 bytes, and then read only one?
Do you really need to send a 0 to the device on every pass through loop()?
The code is not at all clear. You should have a function to get data from the proximity sensor. You should have a function to write data to the potentiometer. Do not write to the pot in the reading function. Do not read from the sensor in the writing function.
Why does it appear that the address of the proximity sensor is stored in tof_sensor? Or is that the potentiometer address? Use names that make sense.
Posting code that actually compiles is a bonus.