What do they do with the Chilazon?

Rashi: They extract its blood. Nevuzaradan left people to gather them, for the sake of royal clothing.

Ha'Boneh (30b): Hash-m wanted to make His flock dwell in a land, that aside from flowing with milk and honey, is the most beautiful. It has balsam trees, which are most fragrant, and dye from blood of the Chilazon, for royal clothing. He wanted that Yisrael, in addition to yielding Peros and food, their good deeds will give to them a good scent. However, when they sinned, they were expelled from there. To remember these, [Hash-m caused] the enemy to allow Aniyim to engage in these (balsam and Techeles).

Rav Elyashiv: It seems that this is the Chilazon used to make Techeles. Even though it comes up only once in 70 years, we can say that it arises every year, just they find it only once in 70 years. Therefore, he left people to look for it every year. Alternatively, once in 70 years it arises, remains there and reproduces constantly.

Yad Ramah (Sanhedrin 91a DH Amar): It is not Chilazon from whose blood we make Techeiles for Tzitzis. That Chilazon is found only once in 70 years.

Why does it say 'R. Yochanan ben Nuri stood and said...'?

Ha'Boneh (30b): A great principle is that in pressed circumstances, it is better to fulfill a Mitzvah than to abandon it, as long as he does not transgress Chachamim's words. He was very zealous to oppose R. Tarfon, to teach this principle. The same applies to all Mitzvos.

The Beis Yosef (264) permits to light Neros of wax and Chelev. If so, why did R. Yochanan ben Nuri say, what will people in Bavel, Madai... do? They have only sesame oil, nut oil...! Wax and Chelev are found everywhere!

Daf Al ha'Daf: R. Yochanan ben Nuri challenged R. Tarfon, who permits only olive oil.