I couldn't tell you how things in LA are, but here it's pretty good. I've fast become familiar with the hospital, so maybe I can help.
Basically, I believe the hospital is warranted or necessary when your mental illness prevents you from being able to care for yourself - whether by being so depressed you can hardly get out of bed or maintain your and your surrounding's cleanliness or your bills and you need intensive help in finding a helpful medicine, or by being suicidal or homicidal, or by being delusional/having hallucinations/psychosis. Here, I've also seen people in the hospital for a trauma(ptsd, abuse, ect.) program, eating disorders, dual diagnosis(mental illness with substance abuse), and while receiving ECT treatments.
There may also be available to you a partial hospitalization program. This would probably be helpful to you if you're at the point you're considering hospitalization, but it's decided you don't necessarily need to be inpatient. The two I've been to have been pretty good. The best thing is the groups of people who really understand.

But the surest sign is if you're thinking about hurting yourself. That really doesn't need interpretation - it means you need to be somewhere safe so things can get figured out to some extent.

Ummm... maybe that helps?