How can an Android phone acting as a local hotspot show how many people are connected to the hotspot? Can an Android phone do that? Or even better, ask for permission whenever a phone tries to connect to the hotspot?

This is because with iOS, Mac, or other devices, they may "connect to this hotspot" as free Wifi, and transfer or download 500 MB, 1.2 GB of data as they please. But the hotspot uses cell phone data transfer (LTE or 4G), which means 1 GB of data will cost US$10 to US$15.

This is especially serious with Apple devices, because if you use one iPhone / iPad to connect to this hotspot, then all your other Apple devices will also get this hotspot (or Wifi) password through iCloud, and all automatically connect to this hotspot, and download the 3GB of app updates, system update in the background, and so all of a sudden, the 1.2GB of software update should have been free, but now is US$12. Multiply by 3 computers / iPhones and 2 times a month and that's like $80.
Yes it will tell you what devices are attached. You also set the security settings, including password, for the hotspot so only devices with the password can connect.