Blocks have a field in the block header which is the time stamp. However this time stamp is set by the miner and can really be changed to whatever they want (although there is some restriction).
Can anyone elaborate on what and how is this fiddling carried out?
BIP 9 has a start time and a timeout time which indicate the time period that a proposal can be signaled for. This times are based on the Median Time Past (MTP) which is the median time of the last 11 blocks as reported by their time stamps. Since miners can manipulate the time stamps, they can change the time stamps on their blocks so that the MTP is never past the signalling start time or so that the MTP is past the signalling timeout. This can delay signalling from starting and end signalling quicker.
Why does this raise the difficulty significantly?
The difficulty is calculated by looking at the block time stamps. The difficulty is adjusted so that 2016 blocks happen over 2 weeks. The difficulty will rise if the last 2016 blocks were found in less than 2 weeks, and it will drop if they were found in more than 2 weeks. If miners were to increment their time stamps so that each block had a time stamp of 1 second after the last block, the difficulty retarget algorithm would think that 2016 blocks had been found in 2016 seconds so the difficulty would increase to compensate for this perceived fast blocks.