Will vs would

'Would' makes the situation sound hypothetical.

"Would" is the past tense form "will", and is used in order to refer to something that happened in the future of the point of writing, but not necessarily in the future now. "will" is used to talk about the future.

Could you please elaborate the difference?

For example, "will" is used to say what we believe will happen in the future:
"She will arrive soon"

"Would", as a past tense form of "will", can be used to talk about a future event at a point in time, but is not necessarily in the future right now. It preserves the "future" aspect of what we are saying when we talk about the past here.
"I thought she would have arrived by now."

JigneshbharatiI will never do that to you

A sincere promise, a pledge.

JigneshbharatiI would never do that to you

(If the situation ever comes up in the future,) I would never do that to you. (Conditional, hypothetical)
Many times the "if-clause" is something just understood, not stated specifically.

dernbu"I thought she would have arrived by now."

That is an example of back-shifting in reported speech. It is not applicable to the sample sentence.
Besides back-shifting in reported speech, there are many uses of "would" such as habitual action in the past, polite requests, subjunctive (imperative), and conditional / hypothetical.
If you mix them up

AlpheccaStars: That is an example of back-shifting in reported speech. It is not applicable to the sample sentence.

Yes, I agree. That was a really bad example.

AlpheccaStars: If

JigneshbharatiI will never do that to you.

As already mentioned, this is a promise — you might say an unconditional promise.

JigneshbharatiI would never do that to you.

This is less a promise than a claim that I am not capable of doing that