how to close application when this.hide is used

The code fragment you show reveals that, unfortunately, you have very little understanding on how to do programming. Note this mistake and don't repeat it: your if-else block is totally redundant.

You need to have something like this:

//check "updated" status you always need to have, because this is something important
if (!updated) return; // no need to ask confirmation if no data was updated in UI
e.Cancel = (MessageBox(/* ... */) == DialogResult.No); //that's it: Boolean is assigned to Boolean

This won't answer your question, but this is because your answer does not have to be answered. The approach shown above works correctly; and it should work exactly like that under debugger (just because otherwise you would not know what are you debugging). You can always stop debugging via the IDE, which is the only right thing is you don't want to save file or continue execution with anything else.

—SA

If you want to show the hidden form after closing the second form you can add this method to first form:

public void ShowForm<T>() where T : BaseForm, new()
{
    T form = new T();
 
   form.FormClosed += delegate(object sender, FormClosedEventArgs e)
   {
       this.Show();
   };

   this.Hide();
   form.Show();
}

And call it in bottun_CLick;

public void bottun_Click(object sender, EventArgs e)
{
    ShowForm<form2>();
}