I don’t think depression should mean not applying to schools you want to apply to. In fact it approaches being discriminatory to say you should exclude certain schools due to depression, though I get the kindness involved. Harvard has many students with mental health issues, believe me.
Regardless of whether you end up at a “top school” or whatever school you feel is the best fit academically, and in terms of size, location and “vibe,” you should register with the Office of Disabilities, submit a letter from a professional , and receive appropriate accommodations.
If you were in the hospital, did you high school provide accommodations like incompletes/ extensions? It sounds like you were still doing the work and didn’t withdraw. During those two months did teachers provide packages of work for you at home?
What do you mean you are “on homebound” now. One thing schools will want to know is whether you have recovered. For a genetic, chronic illness that can be tricky because you don’t fully “recover” the way you do measles, but treatment should be able to restore functioning.
If a student takes a medical leave from Harvard for, say, depression, they have to meet certain criteria to come back, involving proof of functioning. Admissions is going to need to know about your illness and treatment because you are going to mention it to explain grades. It is important to show that you have “recovered” and have gained tools to continue at the level you need and deserve to be.
How much of a role did COVID play in your depression? I find that many students are having mental health issues and not making that connection. I am not sure why. But I imagine it could have been a trigger. You can explain that and how you overcame it.