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3
You are probably referring to the suprachiasmatic nucleus.
Note that, although this is the central clock, there are also so-called "peripheral clocks", for instance in the liver, pituitary and other organs that can finely tune rhythms in the organism.
You may also want to have a look at the Wikipedia page for circadian clock and references therein.
2
Sleep is not homogenous - there are different phases of sleep - REM, NREM-1 to NREM-4. And these different stages may play different roles in 'rejuvenating' the body (as you put it).
When you first fall asleep, you go into NREM-1 phase, which is the lightest sleep, and progresses into NREM-4, and for the first half of your sleep cycle, this cycles so you go ...
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