Niles (David Hyde Pierce) is irritated by a misplaced crease in his pants above the knee. He irons the lower part though.
In S02E20 Niles sticks his finger in his father fishing tackle box and pierces his finger with a hook making it bleed. He then proceeds to walk to kitchen and wraps it in gauze and it does not phase him. However in this episode he cuts finger and the tiniest bit of blood and he faints several times to to blood. So its a complete character error that the writers never remembered.