Hi, Hec.
Hospitals are so difficult to get into these days because of cutbacks that if your doctors feel you should be there, then they are not saying it for nothing.
While other people can feed you stories to further your fear, it does not help. Focus on you only. You have not been diagnosed with schizophrenia, but with depression. Delusions (seeing and hearing things) are not uncommon with depression.
Ask your doctor what to expect from hospitalization. A friend of mine was hospitalized in the fall and his blood chemistry was way out of whack. His meds were therefore not helping him at that point. In ten days though, he was much better and ready for discharge. He too was having delusions, and he has been diagnosed with depression. If that's what your doctor says you have, then why think otherwise?
What I recommend is that at your next visit, you talk about your fear of hospitalization with the doctor.
It sounds like what you're living through is very difficult at this moment. I'd hate to see you prolong this more than necessary, when help is being offered to you. Why not take it and look forward to discharge day in a couple of weeks?