SetMoveObjects works with Hands too..? or not..

[Romulator]

it will raise up with the key in hadn (both "Static") so you can pick up the key

By this, do you mean that both of them have Static Physics ticked in the Level Editor? If so, then they will not move from their position at all, since it sets the mass to be equal to 0. An entity needs a mass greater than 0 to move or in the least be affected by gravity.

Based on what you have said, you will need to make a new arm entity using the Model Editor, since your arm needs to lack gravity in order to rise upward to give the player the key.