But through my reading they say that the new chip emv reader/hub thing runs on a higher ios and that the ipad 2 doesn't go that high.  Am I wrong.  Please correct me if I'm wrong because I'm about to start using my ipad 2 and have to find our what works with it.

The contactless reader will work when connected via USB to the hub that is connected to the Square stand with the iPad 2 running ios 9.1+. iPad 2 tops off at iOS 9.x and doesn't run 10 but 10 isn't necessary. It does not work via Bluetooth.  The Square stand for iPad 2 is no longer sold by Square, though it may be found in some Staples or other places online.

At this point, I would recommend buying a newer iPad Air or iPad Air 2 so that you are on much more current and supported hardware. iPad Air can be found discounted quite a bit to sub $300.  Also, you will be on newer Square stand hardware.