Yes, dizziness can be caused by a spike in anxiety. Plus, having your eyes closed removes the visual sensation that you are not moving or spinning so your only sense of movement is your vestibular system. Anxiety puts this system into overdrive as it tries to make sense.
Have you ever considered hypnotherapy to try to learn to not respond so severely to a contact with your head ? These upsetting contacts appear to be far below any threshold of pain or injury.
Did you see my post about LED Technologies products ? They offer the same wavelengths (Low infrared, near infrared and infrared) as Dr Kahn's products and clinic.
http://revivelighttherapy.com/collections/pain-relief