Short Version on Characters

On characters, short version

Give them motivation that arrives from backstory.
Give them a secret.
Give them connections with as many of the other characters as possible.

Read jim-butcher.com's blog about writing. It's one of the tabs.
Visit writingexcuses.com.
Take a course on creating characters on line or in person.

Top down or Down up development--the end result is the same. Think of a coloring book--they are boring as hell for an adult. Now, take that and put it into an artist's hands and it turns 3D and beautiful or terrifying or compelling--just maybe all three. You want to make sure that your end result has maximum impact on your reader. You can't end up with your first thoughts and motivations for these characters; they have to be ten steps beyond your first ideas. Strive for depth, but always logical, realistic and often simple characteristics. If your character isn't speaking to your heart, then she will not speak to the reader. If she can't make you cry, the reader won't either.

On Getting Stuck in Rewrite... Advice to a Friend.

Ach... Rewrites can be horrors, but they are the vital part of professional writing. I now love them--perhaps too much! For years, I completed novel after novel for my own enjoyment, and I let NO ONE read them. Yet when you strive for professionalism and want others to read your work, rewriting tools in your writer's craft are essential. Your knowledge and skill to rewrite is as important as the initial creation segment of your craft.

As to your specific situation on being stuck on a crucial point, I would stick the whole thing in the drawer for a few months and play with something else. You might find that the perfect solution comes out of the blue or in a re-read later realize that yet another major rewrite needs to be done. In fact, you may never come back to this story and end up canabalizing it to incorporate sections and scenes into another work. That isn't a bad option either.

Several times I start a work thinking I have the most unique and fascinating premise, but, in the details, it just implodes on me. Luckily, after experiencing this the hard way several times, it happens less and less.

Keep your hopper full and your head above water. Putting it away in that drawer to 'ripen' or to 'spoil' is far better than investing countless hours in something that simply refuses to work effectively. Not all stories are meant to be told at this point in time.

Best wishes and a virtual hug to this writing friend and to others in search of stuffing their writer's toolbox.