I thought that once a Hereditary Lord died, then the election would be about selecting a formerly kicked out family of Lords and inviting one of them back into the House? It seems terribly complicated.
More or less. The complication comes because the electorate for House of Lords by-elections is not all the hereditary peers who would have had seats but for the House of Lords Act 1999, but just those hereditary peers currently serving as such in the House of Lords. Some of the hereditary peers represent party groups, so only the other serving peers from that group get to vote. There are just not that many Labour or Liberal Democrat hereditary peers so you get two or three voters filling vacancies.
The Conservative vacancies or those for which all the hereditary peers in the House vote, have somewhat more substantial electorates.
Indeed:
https://en.wikipedia.org/wiki/By-elections_to_the_House_of_LordsInteresting how Labour hereditary peers by-election of October 2003 saw only 3 votes casted:
Conservative and Crossbench by-elections usually takes several counts (and of those few elected by the whole House).
Btw, I'm surprised that only those hereditary that are already sitting can vote in by-elections. The logical course of action would be all hereditary peers, in or outside the House, being able to cast votes.
