Wouldn't this require the hackers have physical access to the CPU?
Yes.
Side channel attacks are extremely powerful, but require physical access (with a VERY few exceptions like the clever audio analysis paper, but that still requires the ability to
hear the computer).
Side channel attacks are why you can't build hardware that's invulnerable to compromise by its owner.
Cache-based side channel attacks like this one are incredibly sensitive to the exact hardware, OS, CPU, and silicon stepping, and even the ambient temperature. That's why they don't get published often -- they usually only work in totally contrived laboratory scenarios.
Article writer is confused about the application of this technology.
Also, not peer reviewed:
The Cryptology ePrint Archive provides rapid access to recent research in cryptology. Papers have been placed here by the authors and did not undergo any refereeing process other than verifying that the work seems to be within the scope of cryptology and meets some minimal acceptance criteria and publishing conditions.