When making a large nose smaller how exactly is that accomplished?

These are very good questions.  The skin does retract over the reduction in the underlying cartilage/bone framework - to a point.  At some point, the skin cannot retract and then the changes under the skin don't matter.  This is why over-reduction of the cartilage/bone is probably the biggest mistake surgeons make in rhinoplasty.  In fact, with thick skin, usually, the framework has to be INCREASED to stretch the skin to be able to increase highlights and definition.  It's counterintuitive for sure.  The best way to help patients understand this is with digital morphing software.  Hope this helps.  

With rhinoplasty the nasal skin has a remarkable ability to shrink to fit the underlying reduced structure of the nose. I have never seen excess skin after reducing the nose.