What is a Starcraft 2 "season"?
Solution 1:
"Season" in this case, refers to the same thing as a "Baseball Season" or "Football Season". Blizzard does this on most (all?) Battle.net games including Warcraft 3 and Diablo II.
"Wipe the ladders" is quite literal -- everyone, from the 'leetest' of the 'leet' to the worst of the worst gets a rating reset and must partake in their placement matches again. (But hey, at least that's another chance at the Hot Shot feat of strength!)