I think the smell-alterting thing was something he thought of later, like while he was in the watch. Observing how Latimer was able to lure them around or something.

The climax was a little strange, especially given the genuine fear and upset he showed at their appearance and going off to hide was an awful lot of trouble. I think the danger he put the school into by his being there was a lesson he was learning as well, but the episode certainly made it seem as though he absolutely needed to hide until such time as he was flushed out. Maybe the Family was weak towards the end of their little life cycle or something. I agree that they mushed it together a bit much.