I wouldn't recommend using hot glue to attach a 10W - or especially not a 20W or higher - MR16 light to anything. They get hot, as hot as or hotter than hot glue does... based on my burnt finger touch test.
Why the housing? Well, in my opinion, having a housing plus a screw mounted tightening and adjusting system makes it: easier to attach and unattach, it makes it more weatherproof, it makes it possible to adjust the direction and tilt of the lights while actually riding., it's more sturdy and it's definitely better looking than just glueing the lightbulb to ones handlebars.
Still, the best reason is, as you mentioned, Monster, aesthetics. I use the same housing - although I use a blank backing plate and a small switch instead of his black rubber backing - and I spraypainted it a semi-gloss black. My headlights look professional enough to look store-bought. If you saw the lights on my bike you wouldn't think "wow. cheap electrical conduit headlights" but probably wouldn't give them much of a second glance because they just fit the rest of the bicycle style.
My headlight build thread:
http://endless-sphere.com/forums/viewtopic.php?t=381