Multicentre bonds like these (in this case, a 3-centre-2-electron or '3c2e' bond) are pretty fascinating and there is a lot of theoretical work that goes on to understand these. I am a chemist as well, and had to go through learning Wade's rules and all of that. There will be a time for an answer such as that.
But for now I want to post a very, very, simple answer that aims to be more intuitive towards the amateur chemist; because I don't see anything that fills this role, and I don't think it is that hard to explain.
What makes banana bonds possible in diborane?
A "normal" covalent bond is two atoms sharing two electrons. Think about $\ce{F2}$. Isn't it a bit weird how those electrons can belong to both atoms "at the same time", to fulfil both their octets? But you can believe that, because you were taught it at an early stage in chemistry. That's what we could call a 2-centre-2-electron, or '2c2e' bond: there are two electrons being held, or shared, between two centres (two nuclei).
Now, fluorine has a lot of valence electrons to form covalent bonds with. Consider what happens if there aren't enough electrons to go around: you need to start sharing the electrons with more atoms at once. So, the 3c2e bond in diborane is just the same, except that it's three atoms sharing two electrons, and somehow those two electrons belong to all the atoms at the same time.
Just like that, everybody can fulfil their complete octet (or duet):
- Each boron has 2 "normal" covalent bonds to the outer hydrogens (4 electrons), plus 2 orange electrons, plus 2 green electrons, which makes 8.
- The hydrogens at the top and the bottom each have one pair of electrons.
What's the catch? Why can't we share the electrons between even more atoms? Well, the more you share the electrons, the weaker the bond gets. This is already evident in the case of diborane: the inner ('bridging') B–H bonds are longer, and weaker, than the outer ('terminal') B–H bonds.
It's like only having two slices of cake to feed three people. Because you don't want anybody to throw a tantrum, you cut the slices up and give everybody 2/3 of a slice, and everybody still gets to have cake, but it's just not as much as they would have liked to have.
But to return to the original question of what makes banana bonds possible: it's not as magic as it seems to be at first glance. The idea behind its formation is exactly the same as a normal covalent bond: all the atoms would prefer to have a complete octet. The only difference is that we've got three bonding partners participating in the bond, instead of just two.
What sort of hybridization is it?
You could figure this out from the bond angles and the geometry. However, IMO, it's not worth finding this out: even if you calculated it and found that it was $\mathrm{sp}^{2.7182818}$ in one bond and $\mathrm{sp}^{1.5}$ in the other, you aren't going to do anything with that information. Note that these are B–H bonds, not C–H bonds, and anyway the two types of bonds (2c2e / 'terminal' and 3c2e / 'bridging') are different in terms of their strengths, so you can't use the hybridisation info to compare it against something like methane.
why don't we see many (any?) other molecules with this bond structure?
Most elements have enough valence electrons to not have to resort to these weaker bonds. For example, carbon already has four valence electrons and is happy to just form four normal 2c2e covalent bonds; but boron only has three valence electrons. Even if it uses these to form three 2c2e bonds, that's only six electrons: not a complete octet.
Sure, it could hope to get a dative bond from somewhere else, but that's contingent on it bumping into a molecule that could give it a dative bond, like $\ce{NH3}$ (see https://en.wikipedia.org/wiki/Ammonia_borane). But if it's trapped a container without any ammonia in sight, then it does the next best thing, which is to try to stretch out the electrons between more bonding partners.
In fact, boron is pretty notorious in this regard: it doesn't have enough electrons to form bonds, but still wants to fill up some kind of 'octet'. The problem of not having enough electrons leads to very interesting bonding patterns in boranes; diborane is merely the tip of the iceberg. For more info, see https://en.wikipedia.org/wiki/Boranes.