I would agree with your first interpretation, they are recommending that each resistor be 10k or greater. They specify a minimum of 4.7k for R1 to avoid excessive current draw from the PWM pin, which can only supply 4mA or 2mA depending on the supply voltage.
I'd recommend a quick LTSpice simulation if you want to experiment with different RC values quickly. If you've not used LTSpice before, there is a great tutorial video here:
https://www.youtube.com/watch?v=XakNk6YsMtk
Otherwise, a breadboard with a couple of pots, adjustable caps, a function generator and an oscilloscope will also allow you to play with your filter values quickly (if you happen to have access to a well equipped lab).
Regards,
Dean Iverson