Please keep in mind that the dialog timer will remain active even if the game window is not on top. This means if you are playing in windowed mode, but have clicked off the game window, returning to the game will appear to instantly progress past the dialog timer. If this is not the issue, then make sure you shut down any background applications that may be slowing down the game, and have an adequate amount of hard disk space to allow for file caching.
Also, the dialog options are already mapped to 1-4. This has been the case since the first episode, as there was a short tutorial in the cop car that outlined this.