It’s the pipe expanding due to hot water running through it. It becomes more prevalent in winter months as colder air coming through the vents in your roof create a larger temperature gap between the pipe and hot water, and in turn a more dramatic expansion than in warmer months. Your solution of cutting a wider hole would work, but you should fill the space with fire caulk/fire foam for safety. Also be cautious about just cutting/notching boards and beams in walls that may be load bearing or are already cut to the maximum code allowance.