But it is interesting to hear of a system applied to inside – anyone know if the technology for that is anything like I described?

Yes, there’s nothing new about the basic principle, it’s been around for years and is very effective – it’s what’s used in ‘noise cancelling’ headphones.

Put simply, microphones on the headphones ‘record’ the ambient sound in the room/aircraft cabin. That signal is inverted then mixed back in to the sound being played through the headset. The inverted signal then cancels out the ambient noise in the cabin due to ‘destructive interference’ and the end result is that the music, or whatever it is you WANT to hear, is still audible, but the ambient noise is eliminated.