Aside from the obvious, what is actually happening to a cigar as it ages?

It's getting closer to being set on fire??

Seriously though from what I've read the oils in the tobaccos start to marry and the harshness (pepper) diminishes while more subtle nuances and flavors come about.

There's no guarantee on aging non Cuban cigars, atleast that's also what I have read. My oldest cigars to me are 1.5 years old so still pretty young and I haven't bought any Cubans yet.

Aging to me is over 2+ years. Depending on the cigar maybe even longer.

Resting is under 2 years time.

Really looking forward to having some 3-4 year old boxes of Cubans in my cooler. It'll take awhile but I enjoy this hobby and the folks here for the most part are great too.

Pepper/spicy flavors, and harshness are two different things

Yeah that's true guess I should've said "pepper and harshness". Instead of saying it the way I did. Thanks.

Some young sticks have both pepper and harshness early on, the cigar that came to mind was the le bijou petit robs I bought last summer. I was expecting great things but was let down by a harsh and bitter experience, I posted here and was told to try one next summer. I'm hoping for a difference to be seen in them, have it planned as a 4th of July smoke.

The ammonia that is in cigars slowly diminishes and the cigar mellows.

There are plenty of NC cigars the improve with a humidor nap. One that comes to mind is Oliva V series. The Tats do age gracefully as well.
I keep one " grab and go" humidor and one for aging. The aged smokes are noticably smoother and consistent from cigar to cigar. The aging humidor is also a higher end unit with considerably heavier Spanish Cedar all around.

The earls are drying out to form crystals.
Rolled in honey dipped in sugar.