Conformational transitions in thermo-sensitive polymers are critical in determining their functional properties. The atomistic origin of polymer collapse at the lower critical solution temperature (LCST) remains a fundamental and challenging problem in polymer science. Here, molecular dynamics simulations are used to establish the role of solvation dynamics and local ordering of water in inducing conformational transitions in isotactic-rich poly(N-isopropylacrylamide) (PNIPAM) oligomers when the temperature is changed through the LCST. Simulated atomic trajectories are used to identify stable conformations of the water-molecule network in the vicinity of polymer segments, as a function of the polymer chain length. The dynamics of the conformational evolution of the polymer chain within its surrounding water molecules is evaluated using various structural and dynamical correlation functions. Around the polymer, water forms cage-like structures with hydrogen bonds. Such structures form at temperatures both below and above the LCST. The structures formed at temperatures above LCST, however, are significantly different from those formed below LCST. Short oligomers consisting of 3, 5, and 10 monomer units (3-, 5-, and 10-mer), are characterized by significantly higher hydration level (water per monomer similar to 16). Increasing the temperature from 278 to 310 K does not perturb the structure of water around the short oligomers. In the case of 3-, 5-, and 10-mer, a distinct coil-to-globule transition was not observed when the temperature was raised from 278 to 310 K. For a PNIPAM polymer chain consisting of 30 monomeric units (30-mer), however, there exist significantly different conformations corresponding to two distinct temperature regimes. Below LCST, the water molecules in the first hydration layer (similar to 12) around hydrophilic groups arrange themselves in a specific ordered manner by forming a hydrogen-bonded network with the polymer, resulting in a solvated polymer acting as hydrophilic. Above LCST, this arrangement of water is no longer stable, and the hydrophobic interactions become dominant, which contributes to the collapse of the polymer. Thus, this study provides atomic-scale insights into the role of solvation dynamics in inducing coil-to-globule phase transitions through the LCST for thermo-sensitive polymers like PNIPAM.