Venice Turpentine is actually a sort of "shellac" or "varnish" used on works of art to preserve the surface of paintings, drawings, etc. It's a resin that has a slight yellow hue. It's also a bit sticky.
VT is used to provide a thin, protective barrier over the sole. Sort of like a band-aid to ease some sensitivity. It's stickyness makes dirt and whatnot stick to it, so that adds more protection. It helps hold in crumbly, exfoliating sole to hold that natural protection on the hoof a little longer. VT does sort of seal the foot (good in moist areas) but the weight and friction on the hooves tends to wear it off rather quickly, so it's very temporary at best.
Idodine in any form is irritating to live tissues. It's disinfective qualitites help to kill fungus/bacteria that could be eating hoof tissues and making them sensitive, so the use of it would be to kill the nasties that harm live tissue. It also dries out the hoof some, but unfortunately, any chemical drying is usually too harsh and can make it brittle. Keratex hoof hardner does that. It's like steel in knifes. If over hardened, the knife shatters, or in the case of a hoof, cracks more easily.
The best way to protect a hoof when first out of shoes it to not exfoliate the sole, simply round the edges of the wall to prevent breakage and then do the actual trim a couple of weeks later, or even better is to give the proper trim right away, fit the horse for boots, and use them. Chemicals usually don't really do away with sensitvity except on a very short term basis.