Think of %ScratchWorkspace% is just a reference to the scratch workspace environmental variable in ArcGIS Desktop.
To see where the data is being stored, just click on
1. Geoprocessing Menu Bar Item
2. Select Environments...
3. Expand 'Workspace'
You can set or view the location of the scratch workspace.
To use the output in another model, as long as the output model is a parameter (the little P is next to the bubble), then the next model should see this as an output and use it.
For a python script, %Scratchworkspace% = arcpy.env.scratchWorkspace