He was sitting on the train with his jacket laid over his right arm.
He sat on the train with his jacket hanging over his right arm.
1) He was sitting on the train with his jacket laid over his right arm.
「彼は右腕に上着を掛け電車の座席に座っていた。」
2) He sat on the train with his jacket hanging over his right arm.
「彼は右腕に上着を掛け電車の座席に座った。」
「上着を右腕に掛けながら」は
with his jacket laid over his right arm
with his jacket hanging over his right arm
と言えます。
lay には「置く・横たえる・かぶせる」という意味があります。
hang には「かける・下げる・つるす」などの意味があります。
ご参考になれば幸いです!