If I lose a Trezor then how does the replacement get access to the same wallet? I am pretty confused.  What I understand is that when I buy a Trezor then it gives me some words that I need to copy down.  When the Trezor starts up does it then automatically create some Bitcoin addresses and keys?  

If I lose my Trezor, then how does a replacement know about my previously created Bitcoin addresses and keys?
Trezor implements BIP32/BIP39 (hierarchical deterministic wallet and mnemonic encoded seeds, respectively).

The mnemonic (12 words) is just a way of encoding a hex seed like 6c5f9d00018f2a2030afcc6f3057e5a4dea6dfb905dd4b0197a9a047bcfe0501662332a3caa846b1223ff3d20cfb295e7f94fe51c94472e3f8429c97754132e9 (whose mnemonic would be business weird season glimpse pole robot surprise next term toddler doctor fresh). The hex seed is then used for a master private key and a master public key pair (in this example, xprv9s21ZrQH143K29DbrSg2YgC2iyW3Gx3FhNExbxEacDWJCmz9xmsxKjon93FSC85Bv4AkszKLK1d3FA6PKS1Wb6xYotbDppezTMQaazbPL6h and xpub661MyMwAqRbcEdJ4xUD2up8mH1LXgQm74bAZQLeCAZ3H5aKJWKCCsY8FzL33Ay3XxoX7xWyq4pejzuSQEQw2hA2CvWvKBgMGTJLgZXRzdbf, respectively).

So if we look at this bip39 tool, the mnemonic business weird season glimpse pole robot surprise next term toddler doctor fresh has a list of addresses which will be used by the Trezor, in order (in this example, the first listed address begins with 18SKy...).

All of this is just demonstrating how it works (do not enter your mnemonic into a website as this example shows!), or as TL;DR: the mnemonic is all you need to recover the keys for Trezor addresses