Can a hobbyist or individual apply for Apple's MFi program?
Yes, smaller groups can apply to be in the MFi program, if they are serious about making a product for the iOS devices.  However, you will need to get approval from Apple for your basic device concept in order to get in the program, then the device will need to pass third-party certifications to verify that it won't interfere with the iOS device, etc.  Finally, Apple will need to approve your final product design before you can start selling it.

They've opened up this process significantly over the last year or so, but given the hurdles you have to jump to get a functional device out there this is still not intended for one-off hobby projects.  A small company can make a product to sell in lower volumes, but you'll need at least $20,000 in development funds to get through the process to your final design.

Recouping that level of investment doesn't require selling millions of devices, but you do have to have some moderate volume of device sales to make it worth your initial development time and money.

We're in the process of building an MFi accessory, and we're a very small company.  Our target sales volumes are not large, but they're enough to make this worthwhile.  If the product takes off, so much the better.