That’s pretty much it.
Cause it owwie 
thats all I got
You have several types of nerves, and your brain isn’t good at receiving signals from different types at the same part of the body. So your pain sensors are firing off like mad, so you rub that spot and now you’re triggering a lot of touch and pressure sensors, which help to override a little bit of the pain signals.
Yea thats what i was gonna say, but couldn’t think of how to word it…
Its to over stimulate the nerves at the location.
Rub on some things or pressure on others…heat and cold work too.
It’s called the Gate Control Theory of pain. Basically works the way bouv described.
Since this thread is up, I’ll ask a related question.
Why does hopping and dancing around help if you bang a knee or a shin?
Mostly because it distracts you, but also again because it stimulates other neural receptors in the area - the ones for pressure, movement, balance, etc. If you make enough neural “noise” with those, it can cause the pain reception to get lost in the background noise temporarily.
Of course, it also increases blood flow to the area, and if you’ve broken some capillaries, the action of hopping and dancing around will actually increase swelling by making more blood leak out of the circulatory system. Which will in turn increase pain, as the escaped blood presses on pain receptors in that form we all know and love: an owie bump.
Same thing, your brain is busy processing “bouncing” (i.e. “strange complicated activity at the knee and shin”) and deprioritizes the pain signal.
So when my daughter asks “Kiss it better”, it’s the same sort of thing? 
No, that’s the healing power of love.