Tsunade could be a bit flustered at first. After all, she is a tough - as - nails leader, and a hug from Naruto, who she has watched grow up, might make her feel a bit vulnerable in a good way. She might then relax and even give Naruto a pat on the back in return, showing her appreciation for the gesture.
She may be very moved. Tsunade has lost many people she cares about in her life. Naruto's hug could be a reminder that there are still people who care about her. She might start to see Naruto more like family, and her reaction could be a mix of maternal and friendly, with a big smile on her face.
He would probably also feel angry. After all, he has sacrificed so much for the village and for them. He might start to question his own beliefs and values. But Naruto being Naruto, he would not give up easily. He would try to prove his innocence and show them that they are wrong. He could go on a journey to find evidence or seek help from other allies who still believe in him, like Shikamaru or Kakashi.
Naruto could also become angry. He might feel betrayed by Tsunade and the village. This anger could fuel his determination to prove his innocence or worth. He could set out on a journey to become even stronger, so that one day he could return and show everyone that they were wrong to banish him. He might also start to question his own beliefs and values, which have been centered around the village and its people.
The other kages from different villages would also have reactions. Gaara, being Naruto's friend, would be happy for him and send a grand gift. The Raikage might be a bit surprised but would respect their decision. The Mizukage would probably see it as an interesting development in the relationships between the ninja villages. All in all, the reactions would range from shock to joy, but in the end, most would support the union.
At first, Naruto would probably be excited. He's always eager to get stronger, so he might see this as an opportunity. He'd trust Tsunade because she's the Hokage and a respected medical ninja. But if the experiments got too painful or started to seem strange, he'd start to question things. He might try to talk to Tsunade about it, but in his Naruto - like way, still be respectful.
Tsunade would probably be very suspicious at first. Naruto suddenly appearing from the future? It's not something that happens every day. She might think it's some kind of enemy's trick or a genjutsu.
Naruto would be deeply hurt. He would probably feel a mix of anger and sadness. At first, he might try to reason with Tsunade, to find out why she betrayed him.
Another way Naruto could react is by trying to avoid Tsunade. He might think he's done something wrong and is in trouble, so he'll start taking different routes, being more secretive about his activities. But as he does this, it could make Tsunade even more determined to stalk him. And eventually, when the truth comes out, there could be a big emotional moment between them, either of relief or of anger depending on how it's all handled.
He would probably be very confused at first. Naruto has always trusted Tsunade, so the betrayal would come as a huge shock.
Tsunade could be impressed by the power of the Kyuubi suit. Given her own strength, she would appreciate the additional boost it gives Naruto. She might even see it as a valuable asset in protecting the village and start to develop strategies around how Naruto can best use the suit in combat situations.
The villagers would be worried at first. Naruto is a hero to them, and Tsunade is their respected leader. Their sudden departure would cause a stir. Some might think that there is a great danger approaching that they are going to face alone. There could be a lot of speculation and unease in the village.