The brain attempting to repair itself. Ethanol paralyzes neurons the more you drink and they eventually die off. But since functions are in a paralyzed state the cleanup of dead brain cells and regeneration is not as productive or efficient as when in a default sober state. And with dead cells hanging around for days you got to give it time to make room for new ones. During normal neurogenesis the cells removed tend to get replaced again sooner so you dont really notice a sharp decrease in cognitive functioning compared to when you are drinking. This becomes an serious problem when it turns into a pattern.

Acetylcholine seems to have potential healing for hangovers.