On the other hand, HAMAS and other resistance groups know that hostage swaps do work.

https://en.wikipedia.org/wiki/Gilad_Shalit_prisoner_exchange

They were too successful this time, though.

Israel can have a hostage swap any time it wants. The goverment gives priority to other goals, though.

Israel government probably doesn't want all those hostages back too soon, because it might undermine their war goals (many hostages are not Israelis, and many would talk to media, and might disrupt the messaging either via either a stockholm syndrome, or just by talking about what they lived through and seen during the Oct 7 attack). Also no hostages would mean one less reason for fighting Hamas, while destroying their own economy.