Well!! that Ob really must like to do c-sections!! Imagine telling anyone that they need a c-sec because they have GBS!! We know that 15-30% of all women have it at any one time, that some have it all the time, vaginally, some never have it, and most have it some of the time. And when you said hydrocephalus I immediately started nodding my head, that yes you would need a c-sec, however, I am assuming that your baby probably had apgars of 8 or 9 and 10!! In other words it was totally unnecessary.
The idea of VBAC's being high risk is highly publicized. There is a slightly higher risk than for a non VBAC that your uterus could rupture. It is about .7 per 1000 women. Not really much of a risk at all. The reason that some suggest hospital birth is that the first way of telling rupture is happening is by EFM...the contraction pattern changes. However, you are likely to also have pain in your scar if this is happening.
If you are worried about herpes, there is also the drug, Acyclovir, which, if taken from 36 weeks on, usually prevents outbreaks...but if you have never had one, there is not much likelihood that birth would be the first. I do wonder why you tested positive this pregnancy?
I hope you go on and have a very nice home waterbirth VBAC. There does not seem to any reason why you would not. Get hold of a midwife now. Do not see the OB again, or not unless you really want to. You will get better, or different info from your Midwife that will useful for you making choices.