I was in steadily moving traffic the other day and a weird smell was emitting from the car which I could only presume was the clutch. I pulled over in a near lay-by and turned the engine off. When I returned to turn the car back on, as I pressed the clutch it wouldn’t let me change gear for about a minute. After that it was okay and I drove home. Will this have a overall damaging effect to my clutch/ car?
I disagree with @yollooool's recommendation to "drive it until it potentially happens again."
This clutch behavior indicates that something's seriously wrong mechanically. The clutch may well be oil contaminated from a leaking seal, and there may be in addition something awry with the clutch hydraulic system (if the OP's car has a hydraulic clutch, that information isn't given). Driving technique may also have played a part.
Whatever it is it will not improve with further use, and whatever parts have so far been affected will get worse, not better. And the next failure may well require a tow.
If the OP plans to keep the vehicle and continue driving it, it should be taken now to a competent mechanic for inspection and repair.
This sounds like your clutch has been slipping, and horrendously so.
steadily moving traffic the other day and a weird smell was emitting from the car
Very similar description to many customers having clutch and gear problems which are later diagnosed as a slipping clutch.
When I returned to turn the car back on, as I pressed the clutch it wouldn’t let me change gear for about a minute. After that it was okay and I drove home.
That minute would have been enough for the clutch to cool down. It sounds like the clutch cooled down and could then start operating normally compared to when it's red-hot. It could also indicate a potential problem with clutch fluid (if it's a hydraulic slave cylinder for your clutch as opposed to fly-by-wire or cable).
I turned the engine back on but it wouldn’t let me change gear out of neutral. I tried to change gear by simply pressing the clutch down but it was almost like when I tried to change gear it would get blocked before it would get into gear
Not being able to get back out of neutral indicates you have a slightly different clutch issue, being the clutch is contacting the flywheel and pressure-plate, stopping the clutch from fully disengaging. This points towards a corroded or contaminated input shaft (which is what the release/throw-out bearing rides along). It's similar to if you tried to change gear whilst rolling down the road, you get that 'wall' when you try to slot it into gear.
Overall, it sounds like sloppy use of the clutch in heavy traffic could have caused this, but it also sounds like there's an underlying problem. Get under the car and find out if there's any oil between where the gearbox and engine meets; if so, it could indicate a leaking input pilot bearing seal or the engine's rear main seal. However, the clutch would need to be replaced at this point, and a full DTI test on the flywheel would be extremely beneficial to ensure no serious damage has been caused.
Being over the internet, it's hard to give a proper diagnosis of a problem. A 'bang' for you could be a 'thud' to me, etc etc. A weird smell could just be a smell you've never smelled before that someone in the trade would have smelt most days in a garage. Not being able to feel the clutch for myself or where it bites or how it engages, no one on here can say for certain if it's going to be fine. If for an opinion, I would drive it until it potentially happens again, and if it's fine for a while, consider checking your driving style with clutch control in heavy traffic. If it does happen again, it could be time to get someone to rip it apart and diagnose the fault at hand.