Note that it's a move action to sense the direction of a creature, which includes pinpointing them if they're within 5'.
I don't believe that's quite right...
Yes it takes a move action to sense the direction, but pinpointing their location does not take an action, it is automatic when they are within 5'.
Think of it this way, if your in a room with a strong scent coming from across the room it takes you a moment to determine what direction the scent is coming from. However, if you are standing right next to it on the other hand you instinctively know where the scent is coming from. The scent ability functions the same way. When it's at a distance you have to act to identify a direction, but when it's next to you you know where it is instinctively.