Hooking up means anything BUT sex. Some people use to for just making out, but usually its used for oral sex. Hooking up means any sexual act with a partner of either gender. Making out, oral sex, intercourse, manual stimulation and anal sex would all apply.

How do you respond when a guy asks to hang out?

Lets hang out as friends and see what happens. If you want to say yes, but are not ready to have a relationship yet, you could say I want to date you. I want to hold your hand. I want to kiss you, but I dont think Im ready for a relationship yet. Give him a small peck on the cheek to show you mean it.