God, there's so many gnats in here... I don't think I'll be able to sleep.
Is God Kvall not also acceptable?
That would be "good evening".
why is "gott natt" incorrect?
That is because, natt, along with kväll, morgon, dag, and eftermiddag are all common gender. So, they are "god" instead of "gott", which is for neuter nouns.
I have a Swedish friend who lives in Göteborg and he tells me that another way of saying it (the Gothenburg way) is Gonatt. Is this true?
That's the normal way of pronouncing god natt in most of Sweden, so your friend is right about that. But the spelling gonatt is colloquial, and it has nothing to do with Gothenburg at all.