I'd be ok if they, as you describe "Set their hips" but most of my kids will rotate or twist early resulting in pop ups or weak grounders to second base. The goal is to hit line drives between the left center - right center gaps.
Can you see how Lexie Elkins rear leg is turning forward and pulling rear hip forward as her hands are tight to her rear shoulder and the top of the bat is going backwards? She gets separation and stretch between her rear shoulder and upper torso that is resisting going forward and her (some call) "hip drive" that is driving forward. So in simple talk: hands are back, hips driving.
You are, like a majority of young hitters, are probably swinging at the ball with you arms. Your arms are going forward and your hips are staying back.
The finish of Lexie: can you see how the "hip drive" is pulling/launching her hands and bat through the ball? Her strong leg muscles are turning forward and her strong core/back muscles are pulling back so when released the swing is sling shot by the "hip drive" your coach is talking about.
^her hands are coming from behind the rear hip.
We do some pre set drills to help kids feel what it is like.
how are you teaching that down and in of the rear knee? are you teaching that goes first and pulls hips?