Pauli exclusion comes from the fact that the wave function of the $N$-electron system has to be anti-symmetric under exchange of the particle labels; this is a consequence of the fact that electrons are indistinguishable (and that they are spin-1/2 particles).
Let's see what happens when you try to put three electrons into three states that all live in a two-dimensional space. Suppose that the space is spanned by the orthonormal basis $\lvert v_1\rangle$ and $\vert v_2\rangle$. Then, consider three different states in this space,
\begin{align}
\lvert\psi\rangle &= a_1\lvert v_1\rangle + a_2\lvert v_2\rangle\,,\\
\lvert\varphi\rangle &= b_1\lvert v_1\rangle + b_2\lvert v_2\rangle\,,\\
\lvert\chi\rangle &= c_1\lvert v_1\rangle + c_2\lvert v_2\rangle\,.
\end{align}
Putting three distinguishable particles in these three states would correspond to the state
$$
\lvert1:\psi\rangle\lvert2:\varphi\rangle\lvert3:\chi\rangle\,,
$$
where the number is the particle label. Now, if these three particles are fermions, then we need to anti-symmetrize this state. This systematic way of doing that is to form the Slater determinant,
$$
\lvert\Psi\rangle =
\begin{vmatrix}
\lvert1:\psi\rangle&\lvert1:\varphi\rangle&\lvert1:\chi\rangle \\
\lvert2:\psi\rangle&\lvert2:\varphi\rangle&\lvert2:\chi\rangle \\
\lvert3:\psi\rangle&\lvert3:\varphi\rangle&\lvert3:\chi\rangle
\end{vmatrix}\,.
$$
We would then plug in the expressions for $\lvert\psi\rangle$, $
\lvert\varphi\rangle$, and $\lvert\chi\rangle$, but upon doing so, we'd see that the columns (or rows) are not linearly independent, and so we would get zero for the determinant.
This is, fundamentally, what it means that fermions need to occupy different states. You have to put $N$ particles in $N$ linearly independent states; otherwise, it's impossible to anti-symmetrize the wave function.
This is why we can only put up to two particles in 1s shell, up to six particles in 2p shell, etc. It's not that we're "using up" hydrogen orbitals (for multi-electron atoms, the hydrogen orbitals are generally not great approximations); rather, it's that these spaces are 2 dimensional (1s), 6 dimensional (2p) and so on (as long as we're including spin), and we can only use linearly independent states to put the particles in.