Hi Viva,
I was in the same position as you are. I applied for Master's program exactly because I did not feel I could handle the stress of PhD. I did get the same advice as you did, that I should go as far as I can as well as the encouragements that I am well-prepared for PhD. I stuck with my decision, even rejecting the offer of PhD that came from a school despite me applying for its Master's program. I did get into a really good school for my Master's, and there I was able to deal with my depression. I wouldn't say I wasn't stressed out, because the whole year was pretty difficult for me, but I don't know what would have happened if I had been in a PhD program. I know that if I do apply, I want to be as confident and motivated as can be, because ultimately I want to get into a good school with the right fit. Now that I have finished the Master's program, I can say that I am in that place now, and really feel that the time is right for PhD.
Having said that, it ultimately comes down to what program you want to do. You did mention that it's hard to find Master's program that fits your interest. And I feel that you are now already leaning towards PhD. If encouragements are what you need, then I think you should know that yes, you are very capable, you have a respectable background in research, and you already have an idea of what you want to study. YOU CAN DO IT. Do visit the schools, maybe talk to the resident psychiatrist, and get a feel for the people you will be working with. They're gonna be the ones who will take care of you. I depended a lot on my gut feelings because depression can really mess up with your rationality. Don't feel like you have to push yourself to your limits, and be very loving to yourself. And lastly, don't regret any decisions you have made, because either way you are taking steps towards improving yourself.
I'm rooting for you. Good luck!