Dont know what they mean by waves, possibly bulges and in which case yes they would need replacing. Tyre rotation however is a bit over rated and no you dont have to rotate them with exception for some 4 wheel drive vehicles.
It's reccomended that you have the better tyres on the rear of the vehicle regardless of if its front or rear wheel drive.
Im suspecting that you proberbly went to a fast fit place. Funny how nearly every car they see needs 4 tyres. I would seek a second opinion from a reputable garage just to checkout those waves/bulges just to be sure though.