beginner sprint tri question

I think they want to know what you expect to average over the course of the swim. They're probably trying to group you near swimmers of similar ability.

Yes they are looking for your average. I have done many races like this and I can not tell you how annoying it is to have to swim past a lot of people who were shooting for the stars with their time if you know what I mean. If you are racing in a small local community it is very important to make a good impression if it is your first tri. You don't want to be remembered as the person everyone had to pass because of a wrong swim time. Good luck with your tri. Hope you get bit by the bug.