IMO, mental toughness isn't something that can be instilled by a coach- it has to be recruited. And you don't have to recruit a whole team full of tough guys, just a few that will serve as your leaders, and let their attitude filter down to the rest of the team. Players don't fight for their coaches, they fight for their teammates. When you have a whole team full of guys whose biggest fear is letting down the guy beside them, then you have something really special.
Just look at bammer's QBs since Saban got there- they aren't the most talented, but they're gritty, tough guys, and the team seems to take on their personality.
Mental toughness CAN be instilled by a coach. Ask anyone who has ever been in the military and went through basic training by their coach (a drill sergeant) I know I've seen it and done it. Mental toughness is built by putting people in mentally and physically demanding situations under severe distress. The cream will rise to the top the rest fall to the bottom where they belong.