Hydration of hydrophobic solutes in water is the cause of different phenomena, including the hydrophobic heat capacity anomaly, which are not yet fully understood, Because of its topicality, there has recently been growing interest in the mechanism of hydrophobic aggregation and in the physics on which it is based. In this study we use a simple yet powerful mixture model for water, an adapted two-state Muller-Lee-Graziano model, to describe the energy levels of water molecules as a function of their proximity to nonpolar solute molecules. The model is shown to provide an appropriate description of many-body interactions between the hydrophobic solute particles. The solubility and aggregation of hydrophobic substances are studied by evaluating detailed Monte Carlo simulations in the vicinity of the first-order aggregation phase transition. A closed-loop coexistence curve is found, which is consistent with a mean-field calculation carried out for the same system. In addition, the destabilizing effect of a chaotropic substance in the solution is studied by suitable modification of the MLG model. These findings suggest that a simple model for the hydrophobic interaction may contain the primary physical processes involved in hydrophobic aggregation and in the chaotropic effect.