Symbolism, Imagery, Allegory
The imagery of waves represents time, especially on Gordon's side of reality. Specifically, waves symbolize the flow of time, and the ocean is tuned to the concept of change.
Change is certainly possible in the novel, but its effects remain hidden from the characters, difficult to grasp although you know they are there. Likewise, the ocean's waves do alter the landscape, but they do so in such an unobtrusive way that it can be difficult to notice. And in a move that is totally Zen, the ocean itself never seems to change, though it is always moving and shifting with waves and currents.
We see this symbol clearly laid out when Gordon is at the beach contemplating the changes of La Jolla from Raymond Chandler's days. He thinks:
[…] somehow [Chandler] had never mentioned the sea and the remorseless, roaring breakers that punctuated the long rambling sentences of waves, always gnawing at the shore. It was as though some unnoticed force came over the horizon, all the way from Asia, and chipped away at this cozy pocket of Americana. Stubby breakwaters tried to blunt the effect, but Gordon could not understand how they could last. Time would eat all this away; it had to. (13.6)
At the very end of the novel, time and waves come together to form a single image in Gordon's mind:
He saw the crowd and thought of the waves moving through them, breaking into white, swallowing foam. The small figures dimly sensed the eddies of the waves as paradox, as riddle, and heard the tick of time without knowing what they sense, and clung to their linear illusions of past and future, of progression, […]. (46.98)
Gordon sees the waves of time moving through the crowd, changing them as the Pacific changes the West Coast. Also like the ocean, time does not begin at one point (the past) and end at another (the future). Any limits put on the seascape, such as a horizon, are part of our limited perception as observers, just like the limits we force on our conceptions of time.