We can define time at any arbitrary scale, Planck time is more like a limit to what we can measure.

Time doesn't slow down on a massive object in its own reference frame. Think of the "one hour here is seven years on Earth" meme from Interstellar. To them, time is moving normally, but relative to Earth, it's moving really slowly.

Time only passes differently relative to other reference frames (their planet and Earth, for example). Thus the theory of relativity!