Hi CarsonZi - please take this response as based upon my own experience, rather than anything officially AYP. I'm not sure what Yogani had in mind when he refers to being on the inside of the nerve.
When a person begins spinal breathing, it's common to experience the sushumna as a thin thread or cord. At this point, s-he is on the 'outside' of the thread, looking in. It starts as a visualization, as suggested in the lessons, but then over time and consistent practice, the visualization starts to be physically experienced. (Almost impossible to describe, so suffice it to say that when you feel it, you know it, and with regular practice you'll get it). (Maybe you already have). Once you 'feel' the thread, over the course of time it starts to expand, so that instead of a thin cord, it's now a hollow tube, maybe 1" in diameter. Then over more time, the tube is 12" in diameter, and so on. At some point it expands to such an extent that you experience being 'inside' the tube, or sushumna. It's literally impossible not to be, as it expands beyond the width of your body. Try to imagine standing in a hollow piece of tubing, 3 or 4' in diameter, and doing spinal breathing. That's the sensation.
So if your breathing is currently 'outside' the sushumna, it's probably because it hasn't started to expand yet. In time it will, and then you'll slowly make the transition (effortlessly) to being 'inside'. I agree that it's hard to synchronize the breath and the visualization of the nerve, and fwiw it took me about a year to get it right. There are many suggestions on how to do so, if you do a search on Spinal Breathing Pranayama. It seems to be one of the most difficult of the practices to get finely tuned, but once you do, it's extremely powerful.