Not at all. The source of this idea is in the analogy with bone lenghtening, which was drawn many years ago and is completely groundless.
Which has nothing to do with the biology of Collagen fiber growth. Damaged collagen structures can repair themselves in cross-linked fashion that cause them to be tougher without being any longer; making future attempts even harder. The science is pretty clear on that; its not an analogy to anything.
Actually, most manual exercises are at higher intensity than hanging. Jelqing can apply a degree of intensity that is about never reached through hanging.
I would disagree on that. Given the high amount of void space in the penis, the actual cross-sectional area of the tissue is pretty small. 10+ lbs of hanging is going to create much more stress than a couple psi of internal pressure from forcing blood into your penis.