Why is it called belly button?

'Cause it is on the belly and unless taped early on it will protrude like a button! :)

"penis" was already taken

Origin: 1875–80, Americanism; belly + button

http://dictionary.reference.com/search?q=belly+button&r=66

The term belly button was coined around 1877.

http://cancerweb.ncl.ac.uk/cgi-bin/omd?belly+button

The navel or belly button (also called an umbilicus or, colloquially, tummy button) is a scar on the abdomen, caused when the umbilical cord is removed from a newborn baby.

While the West was more resistant to midriff-baring dresses until the 1980s, Indian women have traditionally worn saris that usually expose the navel as the blouse/choli that is worn with it is intentionally kept short. In Indian culture, exposure of the navel is not considered a taboo and has, in fact, long been accepted as a graceful identifying mark of a married woman. A dimpled navel is considered a special asset of any prospective bride especially amongst South Indian women and an important quality of any budding Bollywood actress. Other Indian communities that take navels in their stride include the Rajasthanis and Gujaratis, whose women leave the midriff exposed while wearing short cholis with traditional gypsy skirts. However, these women cover their heads with a 'chador' and even cover their faces in front of strangers, which lends credence to the belief that navel-baring in India has a symbolic, almost mystical, association with birth and life and that the display is meant to emphasise the centrality of nature in the nurture role.

# The word "navel", or its equivalent in other languages, has been used sometimes for the center of something, e.g., "nave" of a wheel.

# Tortellini might represent the belly button of Venus, the Goddess of Love in Roman mythology

http://en.wikipedia.org/wiki/Navel

button:

(biology) rounded part: a rounded knob-shaped part or organ, e.g. the head of an unripe mushroom, especially
the button mushroom.

http://encarta.msn.com/encnet/features/dictionary/DictionaryResults.aspx?refid=1861593735

Since the naval resembles a button mushroom in some
persons, the name was so given informally.