Interactive Infographic: What Would A Hyperloop Nation Look Like? - http://pulse.me/s/zGKTR
Your nose is an airborne molecule detector. And higher concentrations of molecules will give you a more intense smell. There are olfactory receptor neurons in the top of the nose. These have cilia that extend down into the mucosa lining.
The actual “receptor” parts are on the cilia. There are as many as 1000 different kinds of receptors, and each one “binds” (sticks) to a different kind of volatile chemical. This makes the neuron fire, telling the brain that that neuron’s special kind of volatile is present. The combinations of different kinds of neurons firing is perceived as a smell.
Humans have 10 square cm of olfactory epithelium; dogs have 170 sq cm. Dogs are way better at smelling than we are. Insects have these things on their antennae.
How exactly the “binding” works: still up for debate. Reason to become a scientist!