Error, When you set this $x^2=t$, so $x=\sqrt{t}$ it is wrong because
$$-1\le x \le 1$$
that is $x=\sqrt{t}$ is not only positive but can be $x= -\sqrt{t}$
Trick to reach your method see that, $\sqrt{1+x^2}$ is an even function therefore,
$$\int_{-1}^{1}\sqrt{1+x^2}dx = 2\int_{0}^{1}\sqrt{1+x^2}dx$$
Now you are allowed to:
Let $x^2=t$, so $x=\sqrt{t}$ and $dx=\frac{1}{2\sqrt{t}}dt$. So we have
$$ \int_{-1}^{1}\sqrt{1+x^2}dx = 2\int_{0}^{1}\sqrt{1+x^2}dx =2\int_{0}^{1}\sqrt{\frac{1+t}{t}}dt$$
But Rather you could easilyy set $x = \sinh u \implies dx = \cosh u du$
and $\sqrt{1+x^2} =\sqrt{1+\sinh u^2} = \cosh u$
$$\int_{-1}^{1}\sqrt{1+x^2}dx =2\int_{0}^{1}\sqrt{1+x^2}dx \\=2\int_{0}^{\sinh^{-1}(1)} \cosh^2 u du= \int_{0}^{\sinh^{-1}(1)} 1+\cosh2 u du\\=\sinh^{-1}(1) +\frac12 \sinh(2\sinh^{-1}(1)) $$
Using $$\cosh2u = \cosh^2 u +\sinh^2 u~~~and~~~~ \cosh^2 u -\sinh^2 u = 1.$$
on the other hand we have,
$$\sinh 2u = 2c\cosh u \sinh u = 2\sinh u\sqrt{1+\sinh^2 u}$$
Using this we have $$ \frac12 \sinh(2\sinh^{-1}(1)) =\sinh (\sinh^{-1}(1))\cdot\sqrt{1+\sinh^2\sinh^{-1}(1)} = \sqrt 2$$
Therefore,
$$\color{red}{\int_{-1}^{1}\sqrt{1+x^2}dx du=\sinh^{-1}(1) +\frac12 \sinh(2\sinh^{-1}(1)) = \sinh^{-1}(1)+\sqrt2.} $$