Yes, it hurts them...for pekes sake, it bleeds (directed at the groomer)!! I'm a groomer (for only 2 short months now) & I'll admit, I've had my share of cutting the quick...& I feel SO bad when it happens, cuz some (not all) dogs yelp!
Just a little fact: sometimes the quick is too long (in your case I'm thinking it was not) & it needs to be cut to retract.
About the pedi-paws...it's super quiet. I only use it to file the tip of the nails smooth. To file down a long nail w/it is not recommended cuz yes, it'll get too hot. I take out the bothersome cover thing.
Just a lttle tip if you're going to cut your Yorkie's nails (or any black nail): Cut the nail tip little by little until you see a black dot in the middle.