Uncontrolled mania brought on by sustained stress or lack of sleep can most definitely lead to psychotic episodes that include hallucinations. Not fun.
There's different severities of bipolar disorder and manic episodes can worsen to the point of hallucinations and psychosis when left untreated. I've read quite a few books on bipolar and lack of sleep for many days and hallucinations are more common than many people realize. Myself included until I read books on the subject.
No problem, if you're interested in reading about this I highly recommend the book An Unquiet Mind. It's a true story about a psychologist who finds out later in life she is bipolar. It's interesting and goes in depth into her manic episodes. I strongly recommend it.
No. Mania by definition includes psychosis (otherwise it's hypomania). Psychosis is roughly defined as "loss of contact with reality", and delusions and hallucinations are the main symptoms. Sleep deprivation can certainly trigger mania though.
But I am really glad they got help, even responsible enough to get help.