Not to pick nits, but many of you are talking about tape loops, but they weren't loops, they were about 8 seconds of linear tape with a weight on the end to "rewind" it when you let up on the key. That's one of the things that made them sound so distinctive - the recorded attack at the beginning of every note.
You're absolutely right. The tapes were just a straight piece of tape.
There was what amounts to a washing machine motor at the bottom of the casing. It had a pulley on the end driving another pulley by means of a rubberised belt and that second pulley was in turn attached to a chrome plated shaft that ran right across the width of the machine - this ran continually while the machine was switched on
All the tapes were laid into guides just above the shaft and the notes were activated by nothing more sophisticated than the keys having a pinch roller on them and a felt pad. When you pressed a key, the pinch roller pressed the tape onto the rotating shaft to drag it over a tape head and a felt pad pressed the tape onto the head. The tape that had been pulled across the head simply fell into a bin towards the rear of the instrument and was long enough for about 8 seconds, as I recall it was a long spring that pulled the tape back rather than a weight. To hold chords for more than 8 seconds a mellotron player had to let go of some of the notes in the chord and give them chance to get pulled back.
There were three tracks on each tape, you could get sets with different combinations of instruments but one of the most popular was one with flute, strings and choir. There was a rotary knob on the left hand side of the keyboard that let you select which of the three tracks would be played by sliding all the tape heads from left to right. The knob was detented but you could wedge it into the middle so that the tape head sat across two of the recorded tracks to give you a string/choir combo (or whatever).
The second knob on the left hand was a pitch control that worked simply by altering the speed of the motor (Strawberry Fields uses this I think).
I know all this because as well as a B3 our keyboard player used to gig one - It didn't cost us $5000 dollars though, back in 1978 we offered a local music shop a straight swap for a Marshal PA system and they went for it - probably $500 dollars worth.
It was a nightmare. As if the whole mechanism wasn't fragile enough the speed control on the motor wasn't that great and the pitch used to wander all over the place. Also, when we unloaded it from a cold van and bought it onto a warm stage the chrome roller that pulled all the tapes would get condensation all over it and then the individual notes would slip wildly and it would just sounds like a braying donkey - a hair drier became an essential part of the band's gig equipment to dry the thing out. The drive pulley would also slip so keeping the thing in tune was a nightmare. Eventually, although we really liked the sound, the keys player got fed up with it and sold it to the keyboard player from Marillion.