Hi Laura!
I've not been to the Caymans, but my husband and I went to Grand Turk in October, which I believe is the hottest time of the year. By hot I mean temperature-wise, certainly not as in the best time of the year! I prefer hot weather, but it was stiffling, paralyzingly hot! We stayed at the Island House, which is a nice enough place to stay, but it is away from the beach up on a hill and the trade winds were not enough to counter-act the relentless heat. If it were this hot when you visit we would definately recommend a beachfront hotel. All the action (diving, drinking) is down on the beach anyway. Our friends stayed at the Osprey Beach Hotel and enjoyed it.
The water temps were nice tho, in the low 80s. There's plenty of coral but as you would suspect with the high temps there's a LOT of bleaching. We saw gobs of turtles, immense crabs, lobsters, and dolphins. One dolphin even tried to "punch out" my husband- I guess he was irritated by all the divers around him! We dove with Oasis and they were good, not fantastic, but amiable and easy to work with.
As for hiking, not only was it way too hot to feel motivated, but also we didn't see anyplace to go. It was pleasant to stroll along the beach a bit and down along the historic oceanfront street in Cockburn town, but as far as a hiking destination I never saw one. The island is quite flat except for a rise or two, and scrubby; it is not my idea of beautiful, looking like a chunk of West Texas that broke off and floated away.
The attitude and the scene on Grand Turk is quite laid back and relaxing, perfect for a few days of diving, drinking and conch eating by the beach, and I'm glad we experienced it, but I can't imagine we'll be back.