"'Therefore I cut you in pieces with my prophets, I killed you with the words of my mouth; my judgments flashed like lightning upon you. For I desire mercy, not sacrifice and acknowledgement of God rather than burnt offerings.'" NIV translation
God did not want mere rituals performed by people but instead wanted His people to turn their hearts towards Him. He would send the prophets to warn and correct them but many times they would not listen and so suffer judgment. It is much the same way with God's people today in that many just want to fulfill what they see as their obligation (going to worship, tithing, etc.) but really don't want the true walking with God on a daily basis.
"Like Adam, they have broken the covenant - they were unfaithful to me there." NIV translation
In Leviticus 26, God set the conditions of the covenant between Himself and Israel. This was a covenant of obedience and the first part was to stay away from idolatry. During Hosea's time this covenant had been broken by God's people.
"Gilead is a city of wicked men, stained with footprints of blood. As marauders lie in ambush for a man, so do bands of priests; they murder on the road to Shechem, committing shameful crimes." NIV translation
God compares the priests to murderers as they are leading the people to idolatry. They were supposed to worship in Jerusalem but were teaching the people to go elsewhere for worship and was in disobedience to God. This reminds us of what Paul was telling Titus about sound teaching and its importance (see Titus 2).
"I have seen a horrible thing in the house of Israel. There Ephraim is given to prostitution and Israel is defiled." NIV translation
In going to worship God in any place that they chose, they were trying to make God to be the "god" that they wanted. This is idolatry or what is referred to here as prostitution. The same type of thing is going on today in the body of Christ as men are trying to shape God into a form that complies to their ways of thinking. A good example of this, today, is the fact that many preach that God is a God of love and that He would not condemn any man and so we are all going to heaven no matter what we believe.
"'Also for you, Judah, a harvest is appointed. Whenever I would restore the fortunes of my people,'" NIV translation
God promises a judgment day (harvest) for all men and that day is set. On that day, all will be brought back to life and God's people will receive their rewards. (see Revelation 22:12)