For me, the magic of mindful observation is that it puts the tiniest bit of space between me and what I'm experiencing. And in that tiny space I can separate out pain and suffering. Typically, I am stumbling along completely fused with my thoughts and feelings and physical sensations. It is awful, and I am suffering. When I mindfully observe 'I notice I'm having a lot of hopeless thoughts' or 'I notice my head is really loud' I am taking a step back- unfusing from my experiences. And my head clears a bit, and the physical sensation becomes localised pain rather than flooding my head with suffering, and I can start to think meta-thoughts, such as 'yes I sometimes feel like this but I remember that it passes after a while'.