Our ears are the body's transducers for audio input. No hearing takes place in our ears or the ear canal.
Hearing takes place in our brain.
Our brain translates the vibrations through a series of nerves and processes them into audio information. The way that the brain processes this information is only somewhat understood. However, there are many phenomena that occur that can only be explained through psychoacoustics. Here is an experiment that you can try. While humming, place your hands over your ears.