On the Blast Door Map, next to the C3 Station, there is reference to a "geological composition likely to cause magnetic interference with weather research project". Interference which "might also prevent location from use as listening station/cryptography research or analysis". It is possible that whatever device causes such interference is also cloaking the Hydra Island.
Hydra Island is cloaked in some fashion. This would explain why no one has seen it from the main island and might also explain why Michael was given a precise heading to proceed on.
Hydra Island is invisible to the main Island for the same reason that's keeping the outside world and satellites from seeing the whole "Lost-Islandworld".
The Island is a closed universe. When you get to one edge you find yourself looking at the beginning. So, from the northernmost point on the Island you have a clear view of the southernmost point on the Island.
This would explain why Juliet said Sayid/Sun/Jin could sail around in circles forever.
It would also explain why Desmond called it a "snow globe."
Was once part of the main Island. Due to sea level rising, it became separated. All the stations were meant to be on one island.
Not likely considering it was so animals couldn't get off.
Kate was brought to Hydra Island in order to choose a mate (either Jack, or Sawyer) and conceive. Due to the fact that, according to Juliet, mothers who conceive off the Island (the main Island) survive the delivery of their child.
If mothers only died after conceiving on the main Island, all the Others would go to the Hydra Island to conceive and the whole fertility problem wouldn't be such a big issue. If this was a new theory that the Others were testing, it would be a lot easier to use a volunteer from the Others rather than Kate.
Kate was brought there so Jack would do the surgery on Ben. Jack would do the surgery if Kate told him to and the way Kate would do it is if they would kill Sawyer.
In Greek myth, the Hydra was a sea serpent with numerous heads. Hercules was tasked with killing it as one of twelve labors he had to perform as a favour to the gods. Whenever Hercules cut off one of the beast's heads, though, two more grew back in place. In order to kill it, Hercules had to have a friend use a torch to cauterise the Hydra's bloody neck stumps before the new heads could grow. Naming the Island after a mythological creature fits in with the show's running motif of mystical/religiously significant names (ie, DHARMA, "Adam and Eve," etc.)
The name also refers to an animal/creature, alluding to its zoological research. The fact that it had multiple types of research facility (for land and sea animals) may be one reason why the multi-headed Hydra was chosen.
Will be revisited and a secret will be found out about the Hydra Island, possibly a new section of The Hydra or the purpose of the Runway will be revealed.