What does that mean? Does that mean they're holding each others hands?

Native speaker’s answer
Rebecca
Not quite! If it were about holding hands, it would say "your hand in mine," using "in" instead of "on." The phrase "your hands on mine" means to literally place one's hands on top of someone else's hands. It does imply being very close physically, so it could have a sexual connotation to it. Ex: He put his hand in hers, and they walked to the market. => holding hands. Ex: I could feel his hands on mine while we were dancing.