Why do tattoo's scab up?

I watched tattoo shows once like Miami Ink and such. Does the pressure of the needle thing pierce the skin, making it bleed, so it scabs up? Because I always see the tattoo artists have a paper towel to wipe away the blood. Is that how it makes it permanet by piercing the skin, making it bleed? Also, does it hurt to get a tattoo? Scale on 1-10. 1- not hurting at all 5-Half and Half 10-Heck yeah