Re: Feeling a bit discombobulated....
The way that I understand it, the first stage of of both mechanically and chemically sharpened hooks is made with a normal needle grinding method. The wire then goes through all the other stages to make it into a finished hook and it is then heat-treated.
On chemically sharpened hooks, the hooks go through an additional process in which a chemical is used to attack the surface. The thinner parts of the wire are affected and, in particular, the point. The chemical smoothes or "eats away" the metal leaving a sharper, more polished point.
I normally tie 99% of my flies with mechanically sharpened hooks mainly because of the cost of mechanically sharpened vs. chemically sharpened. I do like the chemically sharpened hooks though.