1). The only type of time dilation that I am aware of is due to relativistic effects, such as the the slightly slower frequency of clocks at rest in a gravitational field when compared to clocks in free fall, or the slightly slower frequency of clocks, when traveling at great speed relative to an observer. The only thing we can say with certainty is that the speed of light is constant. If intervals of time were expanding everywhere as you suggested, then we could say that activities were slowing down everywhere, but slowing down with respect to what? Some grand clock outside of time and space, A hyperspacetime clock perhaps? Everything within this time expansion, including a beam of light would automatically be accelerated, so for our velocity of light to remain constant, space would necessarily have to expand to allow for the slower time. It seems to me that this theory would break down when taken to the extreme... when time stops with respect to our hyperspacetime clock and space is infinitely large. This may sound rediculous, and some like Brian Greene in The Fabric of the Cosmos argue that Einstein's results only pertain when the expansion of space has been subtracted out, and that objects beyond our cosmic horizon can recede at greater than light speed, but what if we extended this idea of spacetime dilation to the large scale example of widely spaced clusters of stars traveling along the spiral arms around the massive center of a distant galaxy. Wouldn't this time dilation cause the tangential velocity of stars to increase as they moved outward from the massive center of the galaxies, as was the case for our accelerated beam of light in expanding space. Could this warping of spacetime caused by expansion, which amplifys velocity over time produce the mysterious Archemedian spiral shape we see when looking at spiral galaxies. Shapes that according to Milgrom violate Newton's first law, F=ma? If so, then the rate of expansion could roughly be estimated by rolling the galaxy along one of its spiral arms and measuring the slope of the line created by it's center. Physicists have used several more accurate ways to calculate the overall expansion rate using observations of the intensity of light from quasars to determine distance and the doppler shift of the wavelength of light from distant stars to determine their speed. Many attribute this expansion to a dark energy that acts between massive, distant objects on a grand scale and is much less than the force of gravity.
2). According to Brian Greene's book, Only on the largest of scales is the expansion of space able to overcome the gravitational and stronger electromagnetic forces. Therefore the expansion of the universe is similar to coins affixed to an inflating balloon or poppy seeds within or on a rising muffin. In this model, the size of the seeds is fixed, but the expansion of space continues to accelerate, until eventually distant objects loose their ability to communicate to each other as the expansion of space between them reaches the speed of light. This is what I referred to earlier as the cosmic horizon.
