For digital circuits, Mead and Conway's Introduction to VLSI Systems is a good source of information. It's available online: https://ai.eecs.umich.edu/people/conway/VLSI/VLSIText/VLSITe... (the link seems to be down right now, though.)
For analog circuits, the book "The Art of Analog Layout" is good if you can find a cheap used copy. The designer of the 555 timer wrote an interesting book "Designing Analog Chips" which I found very interesting. It is available online: http://www.designinganalogchips.com/
There's also an online tutorial on IC reverse engineering: http://siliconzoo.org/tutorial.html
The layout looks typical for that era. Keep in mind that this is an analog chip, so resistors take up a lot of space. Also, with just 24 transistors, you don't need to squeeze every bit out of the layout. I've looked at other versions of the 555 timer and the layout isn't much better. Even the CMOS 555 has a lot of wasted space.
How it works is that when you charge a capacitor through a resistor, the capacitor will charge relatively slowly. The rate depends on the value of the components. What the 555 chip does is monitors the voltage level on the capacitor. When it reaches an upper level, the chip discharges the capacitor. When the voltage reaches a lower level, the chip starts charging the capacitor. Thus you get oscillations with the desired timing.
Think of it kind of like filling your sink with water. When the sink gets 2/3 full, you pull the plug from the drain. When the water level drops to 1/3, you put the plug back in the drain. This will give you periodic oscillations. The timing depends on the size of the sink (capacitor) and how much you open the tap (resistor).