How does a hollow-point bullet move smoothly through the air, presenting a 'cup-shaped' nose instead of an actual sharp-point to the fluid? Hollow-point rounds move smoothly through the air when presenting a 'hollow cup-shape' instead of a traditional 'sharp point' to the fluid air.
Does this mean the air trapped, and at some assumed high pressure, in the hollow of the point 'emulates' a rounded shape in terms of fluid dynamics, forcing the fluid to move past it meaning this design of point would potentially be more efficient, at high speed, than an actual physical 'point'?
 A: If the air into which the hollow-point is traveling happens to be uniform (i.e., constant density and pressure), then assuming the bullet is azimuthally symmetric, it should travel "smoothly" regardless of speed if it rotates.  Rifling causes a bullet to rotate as it leaves the barrel of a firearm, which in turn produces angular momentum.  To change the angular momentum of a rigid body, like a bullet, you need to supply a torque.
As the bullet starts to approach the speed of sound, or $C_{s}$, the air hitting inside the hollowed out region will have less and less time (and ability) to reach the stagnation point, move laterally along the surface and up out of the hollowed point region.  Below the speed of sound, much of the air will be able to set up a circulation pattern flowing into and out of the hollowed out region.  This is because the average speed of air molecules is what we call the speed of sound.  Thus, subsonic flow can often be treated as incompressible flow.
When the bullet reaches $C_{s}$, the increased pressure inside the hollowed out region will be high enough that the stagnation region will grow (actually, this would start to happen below $C_{s}$, but we'll just worry about supersonic flow here).  If the bullet passes $C_{s}$, then a shock wave will form and the stagnation region will effectively grow so that a continuous envelope of a shock wave forms.  You can see on the Wikipedia page for shock waves examples for blunt objects, where the shock wave is detached from the obstacle.  This is what would happen in the case of a hollow point bullet.
The "efficiency" of flow is related to drag.  The drag depends upon some shape-dependent coefficient and the cross-sectional area.  Since a hollow-point bullet acts like a blunt object, it does not have a favorable coefficient of drag.  
The hollowed out point is not typically used for aerodynamics, it is used for several reasons.  The first and foremost is that it usually causes the bullet to stop within the target, decreasing the risk of collateral damage.  The second is related to the first in that to stop the bullet faster, the hollow point causes it to deform/inflate in cross-sectional area on impact.  Thus, it causes much greater damage than a full metal jacket that would pass completely through.  There is a third reason, and that does deal with aerodynamics.  The hollow point does not decrease drag, but it does change the center of mass of the bullet towards the rear.  This has the added advantage of decreasing the effects of cross winds.
