Are decimal integer constants and hexadecimal integer constants, different ways to 'represent' values or are they values themselves?
This is philosophy! They are different ways to represent values, like:
0x2 means 2 (for a C compiler)
two means 2 (english language)
a couple means 2 (for an english speaker)
zwei means 2 (...)
A C compiler translates from "some form of human understandable language" to "a very precise form understandable by the machine": the only thing which is retained from the various forms, is the intimate meaning (the value!).
It happens that C, in order to be more friendly, lets you specify integers in two different ways, decimal and hexadecimal (ok, even octal and recently also binary notation). What the C compiler is interested in, is the value and, as already noted in a comment, after the C has "understand" the value, there is no more difference between a "0xC" or a "12". From that point, the compiler must make the machine understand the value 12, using the representation the target machine uses and, again, what is important is the value.
Most probably, the phrase
we should try to reason primarily about values and not about representations
is an invite to the programmers to choose correct data types and values, but not only: also to give useful names for types and variables and so on. A not very good example is: even if we know that a line feed is represented (often) by a 10 decimal, we should use LF or "\n" or similar, which is the value we want, not its representation.
About data types, especially integers, C is not particularly brilliant, compared to other languages which let you define types based on their possible values (for example with the "-3 .. 5" notation, which states that the possible values go from -3 to 5, and lets the compiler choose the number of bits needed for the representation of the range -3 to 5).