WooCommerce - where can I edit HTML generated by hooks?

But what is this? Where does it come from?? Is there any clue in the action name as to where I could locate the HTML being generated for the purpose of editing it?

This is an action hook. It isn't doing anything by itself per say, but the functions listed in the comments hook into it and therefore run when this function is triggered. It says in the comments that function woocommerce_template_loop_product_thumbnail is the function responsible for getting the thumbnail. You can find this function inside the Woocommerce plugin. I use the Sublime Text editor (though I think others will do this too) to search the whole folder for that phrase and it tells me exactly what file it is in. In this case it is what is called a pluggable function and is located in woocommerce-template.php. (It's now called wc-template-hooks.php in version 2.1+)

A pluggable function means that you define a new version of the function with the same name in your theme's functions.php

function woocommerce_template_loop_product_thumbnail(){  echo "apple";}

If you put the above in your functions.php then instead of Woo's woocommerce_template_loop_product_thumbnail() you'd merely see the word apple.

I've read the article on 'hooks and filters' on WooCommerce, but it explains nothing regarding where or how to change these on a case for case basis.

You will make all changes in your theme's functions.php and a case by case basis isn't necessary. All hooks and filters behave the same. That said, they aren't the easiest thing to learn so have patience with yourself. I found filters to be especially tough to wrap my head around.

In a spot of gratuitous self-promotion I wrote a series of articles on the basics of WordPress hooks and filters (one article says it is for Thematic hooks, but a hook is a hook! ) that are all the things I wish people had told me at the beginning of my WordPress career.