Two questions in one. Great questions. Go to the top of the class
I’ll deal with the first part here and post a separate answer about the depression question.
Your friend’s reaction to the hypnotic suggestion is a perfect example of how hypnosis cannot be used to make someone do something against their will. While on stage and for an hour afterwards the suggestion was acceptable to your friend who was caught up in the atmosphere of the live show. Once away from that environment the suggestion of having no bellybutton became unacceptable and the effect wore off.
If you transfer this concept to therapy it demonstrates exactly why “Suggestion Therapy” alone is so unsuccessful. Simply reading a script to someone while they are in hypnosis is not hypnotherapy.
To make permanent change it is vital to uncover the cause of symptom. In most cases people don’t know when they learned to be afraid of spiders or why they are always anxious etc. Even when a person thinks they know the root cause of their problem, in the majority of cases they learn something new or find out a different perspective of how their problems began. When the cause has been uncovered and dealt with the symptom simply vanishes. That is how therapy in hypnosis can be used to bring about permanent change.