junglebeast
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It seems like pretty typical pop-sci language. Very flowery and sweeping, but also quite vague. It might be that he is describing the possible breakdown of the manifold structure at small scales, but it is too vague to know for sure. If I were you I wouldn't waste any more time trying to puzzle it out, you would be better off watching the Susskind lectures on GR or reading Sean Carrolls lecture notes or even reading Wikipedia entries.
None of the other references I have read on GR have mentioned how/why time should behave like a spatial dimension when the universe was small. Are you recommending these sources because they specifically deal with this issue, or because they are just good resources for GR in general?
There are some places in his book where he clarifies to say "not everyone agrees with me here.." but on these subjects, he is very matter of fact and states them as if its simply common knowledge among physicists. Is Hawking the only one who has these beliefs?