Touch is an important part, not only of emotional development, but brain development. Studies on rats [source] found a correlation between being licked or groomed by the mother and learning and memory, as well as willingness to explore their environment. When it comes to humans, Insitutionalized babies who were held an extra 20 minutes per day for ten weeks scored higher on a developmental assessment rubrick [source] than those who are not. On the other hand,
... We do know that babies left to "cry it out" are flooded with "stress hormones" (cortisol, adrenaline, ACTH) which destabilize their immune systems, so we know that it is bad for them biologically, at the very least. We also know that when the brain is flooded with stress hormones, we are forming panic memories. Those memories don't vanish just because the child is preverbal; researchers now suspect that such memories are instrumental in later anxiety and mood issues for some people [Source].
A 2013 study conducted at Stanford University showed that children with childhood anxiety showed larger amygdalae in fMRIs, as well as more connections to other parts of the brain, evidently an indication of the amount of time they spend stressed compared to other children [Source].
Babies are great imitators and can pick up on their mother's depression by showing more depressed symptoms themselves [Source] and [Source]. Stress also negatively affects language learning; a 2008 study from Rutgers University found that babies with larger amydalae had more problems with language ability [Source].
Stress wears down babies' organs as well, for example, when parents expect too much independence of the baby too soon.
Extended stress destroys tissues in mammals, impairing organ function and health (Kumar et al., 2013). Isolation is distressful for rat and mouse babies and has all sorts of ill effects like disorganizing stress response systems and undermining the expression of genes that control anxiety (McEwen, 2003; Meaney, 2001). The effects are much greater for humans. Leaving babies to cry unaided is highly distressful and physically and psychologically toxic [Source].
On the other hand, as Daniel Goleman points out in a study on protective mothers who picked up their six-month old babies and held them every time they cried, versus loving, yet firmer mothers who helped their six-month olds try to understand what was happening and how to overcome their stress, the babies who were helped to make small steps toward emotional mastery were less fearful and more willing to explore than babies who were simply held and comforted. Babies who are soothed and reassured when they fuss are more able to soothe themselves later in life because they've learned that their emotional reactions aren't an emergency- they've learned that their internal reactions to stress are not emergencies, and can be brought under control.
These findings don't minimize the overall wisdom that carrying babies (or "wearing" them) has great overall health benefits for the child because it encourages independence earlier than babies who are more frequently left to ther own devices.
Babies who are carried actually demand less attention than babies who are made to sit by themselves in strollers, seats and playpens, probably because their needs for companionship and stimulation are met at the same time.... We fill our children’s dependency needs so that, filled, they can go on to other things, like exploring the world. We acknowledge that children are children, and need our tending as they grow. Kids who’ve been attachment-parented are age-appropriate in their relationship with their parents, moving from dependency to inter-dependence, and able to form fulfilling intimate relationships as adults. When kids’ attachment needs aren’t filled, those needs eventually get focused on their peer group, often with disastrous results as they get older [Source].
The point of bonding is not that a particular practice is routinely instituted, as if raising healthy children is a matter of going through particular motions. It's not that mothers have to be constantly imitating their child's actions back to them, or they never should put them down; the point is to be present to what they're experiencing, helping babies work through their fussy moments in little increments, and nurturing the connection no matter if mother needs her hands free to work while baby watches, or if they're playing pattycake. Being present in the moment to the baby's needs helps build a foundation of trust and courage for the baby's future development.
As we shall see, children who feel that they have a connection with their parents grow up to be healthier all around. They are less prone to heart disease, alzheimers, and loneliness, and they tend to be more popular than their peers.