No. Local genital stimulation is not mandatory for reaching orgasm. The female anatomy provides for multiple erogenous zones any of which may be stimulated to reach orgasm.
In fact, it has been observed that in the event of absence or trauma to the external genitalia, existing alternate erogenous zones become more sensitive and new ones develop. Some women can reach orgasm by nipple stimulation alone. I have come across women with absent vaginas who are able to reach orgasm satisfactorily by alternate means.

In a study carried out on ritually circumcised South African women, Hanny Lightfoot Klein reports that these women had retained their orgasmic capacity in spite of the local genital mutilation.

There is not any difference between ‘clitoral orgasm’ and vaginal orgasm’. An orgasm may be more or less satisfying depending upon several Factors, but whatever be the means of stimulation, ultimately “All roads lead to Rome.”

What is the physician’s role in helping patients with sexual problem in later years?

The physician should explain to both partners, the physiological changes that occur with age and measure them that a healthy conjugal relationship is a normal and acceptable form of behavior, at any age, because sexuality is as important for the old as it is for the young. Sex education material may be provided to educate the couple, clear any misconceptions and desensitize previous taboos. Sensate focus exercises (sensuous interplay short of intercourse), or other alternatives such as oral .sex, more foreplay, different positions may be advised depending upon the individual needs.

How does one overcome depression?

Supportive psychotherapy could be of great help and if the depression is severe then a psychiatrist’s intervention may be helpful.