John, you aren't a dentist and it shows.
They are files, not needles. They only drill out the root canal which houses the nerves/blood supply, not the "entire inside" of the tooth.
The "candy" smelling thing he is referring to is topical anesthetic. That is rubbed on the gum with a wooden toothpick to numb the tissue prior to the injection. (I think he reversed the steps there) The topical anesthetic comes in different flavors. Which is why he smelled "candy". I think the pina colada flavor smells best myself.
That "rubbery thing" is called a rubber dam, and it's used to keep the field dry.
I understand you are recalling your observation from being the patient in the chair so you might not have it all figured out.
Lastly, you spelled Hygienist wrong. Kind of a pet peeve of mine. An easy way to remember it is Hygienists have two "i's" (eyes) just like everyone else does.