Dr George, that is the sacrificial anode rod, typically made of magnesium. It's job in the hot water tank is to corrode due to electrolysis, instead of the tank corroding.
If a magnesium anode causes your well water to smell, you can try replacing it with an aluminum anode, or remove it all together (although removing it WILL shorten the life of the tank from approximately 10 years [doing no maintainance] to around half of that).
My well water has a very high iron content. This causes the hot water to smell bad. I tried replacing the anode with an aluminum one, but it didn't change. I've found that the only way to keep the hot water smell to a minimum is to dump & flush the hot water tank, & wire brush the anode, 3 times/year.
Here's a tip that will make your hot water tank last up to 3 times longer than "normal" (normal being; you do nothing): At least once every 2 years, remove the anode & wire brush it! After 7-8 years, REPLACE IT! A new anode isn't inexpensive (at around $40-$50), but compared to the cost of replacing the tank, especially if you can't do it yourself, it's cheap insurance & will save you money.