Clutch is engaged in neutral. A car cannot drive forward unless it is in gear. A slipping clutch is blatantly obvious on a hill. The revs go up and the car eventually comes to a halt. With regard to an OBD reader. Unless the car is throwing up a malfunction light an OBD reader will not find anything to report.
Jennifer talks about the blue light coming on. ? I have a Mk 1 and the only blue light I have is the main beam warning. Does the Mk 2 have a blue light for something else?
@Jennifer. Does the yellow MIL come on at initial ignition on? Looks like an engine.
If not perhaps the light is faulty and there are OBD codes to check.
Honda will charge a minimum of £100 to tell you you need to spend another £1000. Get a knowledgeable friend to drive the car for you. Ideally another Jazz owner. If you have to go to a garage go to a reliable back street independent and seek their advice. And don't agree to get work done until you have been back on here.