Brains work with chemical gradients and hormones. There's no magic involved, we just don't understand the meta, and are probably incapable of doing so.
I like to think of this in terms of the information theoretic formulation of physics and the bounds placed on that by the holographic principle. For any system to fully represent another internally, it must contain more bits of information than the system being internalized. In other words, it must contain more matter and energy, or be physically larger. The brain expends an extraordinary amount of energy looking for patterns it can distill into leaky abstractions in order to build internal representations of reality without violating this principle. However, since the abstractions are leaky, our understandings are imperfect.
You mean, incapable of understanding? Why would this be so?