response.writeHead and response.end in NodeJs

In your code, the writeHead() is called to write the header of the response, that the application will serve to the client. The end() method both sends the content of the response to the client and signals to the server that the response (header and content) has been sent completely. If you are still going to send anything else, you should call write() method of res response object instead.

The options JSON object is a modifier that you may use, to override the default behaviour of the createServer() method. In your code's case:
+ key: Private key to use for SSL (default is null)
+ cert: Public x509 certificate to use (default is null)

You can find more in this section of the Node.js API doc about the response.writeHead() method.
You can find more in this section of the Node.js API doc about the https.createServer() method.

Those calls to writeHead and end are not being done in the createServermethod, but rather in a callback.

It's a bit easier to see if you split out the callback into a separate function:

function handleRequest(req, res) {
  res.writeHead(200);
  res.end("hello world\n");
}

https.createServer(options, handleRequest).listen(8000);

So here we define a handleRequest function and then pass that into the createServer call. Now whenever the node.js server we created receives an incoming request, it will invoke our handleRequest method.

This pattern is very common in JavaScript and is core to node.js' asynchronous event handling.