"You all need to stand at a hand's length apart from each other."
Is this acceptable?
It sounds a little unnatural, because it's so close for people standing together. An arm's length apart is commonly used in that situation.
I'd prefer to use 'a hand's length/width' for aligning smaller items. For even smaller items, you might use a 'finger's width' apart. Note that a hand's width will be less than a hand's length. The average human hand is about twice as long as it is wide.
Please line the jars up a hand's width apart.
Make sure the headset microphone is about two finger widths from your lips.
Neat, or on the rocks?