I'm using fresh distilled water every 2 days, and redip in rooting hormone as well on days I change water, is this what the beginning stage of root development looks like? It's been 6 days since I started.

Yep!  Those are roots starting to form.

woah, you are rooting in water?  Cool, I never had any success with it.  Distilled water and reapplication of hormone. good to know.  I may try that next time I play with hibiscus.

Those are lenticels.  Plants develop them in low oxygen environments.  Sometimes but not always roots will come out of the center of them.  The fact that they're brown is not a good sign.  I think you're better off in a well draining media or using an airstone in your water.