I’m trying to develop a somewhat similar component to the hotspot, where I can draw and paint an area on top of the map to show what areas have been collected into groups. This will later on be a sort of button to switch views. However, I was wondering what king of plugin is the one that will be displayed on the map tools tab and if there are any examples for this?
The kind of plugin you describe does not exist.
Generally there is unfortunately a lot you can do on a Map in the Smart Client that is not open for being done through code in a plugin.
Giving it a twist, I think what comes closest is that you can develop items that can be placed on the map which can also have a context menu. Note however the actions on these cannot be used to directly manipulate what the user sees in the Smart Client. If it might yet be interesting please explore the Sensor Monitor sample.
If I understood correctly, as of now, there’s no way to make a plugin element to highlight a polygon on top of a map?
If so, what is the use of the plugin elements that appear in the map tool window? I see that in the post there are some examples, which I guess will not allow a polygon shape? or are these elements the items you talked about?

Yes, the plug-in element (aka MIP item) is just like a camera item, it does not have a shape covering an area on the map, but rather is a point on the map and is then illustrated by a icon.
If it still sounds interesting I recommend the sample I mentioned..