From 1992 to 2002, Wolfram worked on his controversial book A New Kind of Science,[4][32] which presents an empirical study of simple computational systems. Additionally, it argues that for fundamental reasons these types of systems, rather than traditional mathematics, are needed to model and understand complexity in nature. Wolfram's conclusion is that the universe is discrete in its nature, and runs on fundamental laws which can be described as simple programs. He predicts that a realization of this within scientific communities will have a revolutionary influence on physics, chemistry, biology, and a majority of scientific areas in general, hence the book's title. The book was met with skepticism and criticism that Wolfram took credit for the work of others and made conclusions without evidence to support them.

To address the specific question, I don't think searching for the magic program out of all possible ones makes any sense. This is like searching for the proof of a theorem by looking at all substrings of pi. It'll certainly be in there somewhere, but why would you do it so inefficiently? The immediate next proposal people will make is to add search heuristics, demand self-consistency, match with experimental data, and so on. That could work, but it's literally exactly what we're already doing...

Physicists don't know whether Wolfram's ideas work or don't work, because there is no "idea" there. Wolfram's work would be the popular slogans for a real research program, if such a program actually existed, but it doesn't. The fatal problem of popularizing science is that there is never time to get beyond the slogan level, which means that slogans that actually denote something can't be distinguished from those that don't.

Hallucinations are probably what to think of with psychosis. It's perceiving something that simply isn't there. It can affect any or all of your sense and can be as minor is a couple lights or sounds that aren't there to basically perceiving an entirely different world.

There's kind of two ways this forms: Hallucinations and delusions.

Psychosis is a broad term for "your brain is struggling to determine what's real and what's fake"

Delusions are belief that is false that a person holds is completely unwilling to change it even with evidence that is 100% completely and totally contradictory to that. Stuff believing a loved one has been replaced by someone else, believing you have literal super powers, stuff like that. That said I don't think having a few minor delusions is really going to be labeled as psychosis. It's almost expected for kids and young adults to think they are basically indestructible, after all.