I think what the video is trying to say about the 'observer' is:
Think of the observer as our eyes, well, from what we know there's 11 dimensions in the quantum theory (the strings), but we can only experience or see one of them.

It's not like the particals or waves know they are being watched it's just that because they have so many possibilities that our eyes can't comprehend to see how they turn out that way, bascially all we are able to the big picture, the speculations, but not how they end up like that.

In theory if we can see the small fine details then we can solve the string theory.

Think of it as a pc processing information at an exabite/sec, our current pc will not be able to keep up with the changes, but they will adjust to recieving infomation at their optimum standars.

I like the video.