|I am a little confused on how air pressure can drop as air flows through a small hole. I understand that speed and pressure are inversely proportional but aren't volume and pressure inversely proportional as well?
If you squeeze air into a small space, its pressure will rise (yes, pressure and volume of stationary air are inversely proportional). But flowing air is a different story. When an airstream passes through a narrow channel, it must speed up and when it does, its pressure drops. That's aerodynamics, not statics.