Good question..but I don't think there is a right or wrong answer here.
The distance between your hands will vary from one person to another and also from one water condition to another..even how hard you're paddling.
I don't claim to be an expert on this but here's what I think.
These four pics are cut from my paddling vid..It shows my hand and arm positions in one paddle stroke.
IMO..The lower hand is fixed and easy to find the right spot..At the point in the last two pics the paddle should be fully dipped..and your back should be fairly straight with knees slightly bent..If you bang the rail of the board with the paddle it should be with the paddle shaft..not the paddle blade.
Also there is much more power the deeper you go..The first 5" of water is useless..You just have to lift a boat propeller up near the surface and it will spin like it's in air.
A few weeks ago I was going to stick a grip on my paddle for the lower hand and thought I would put a piece of white tape at the top and bottom of where I thought the lower hand should be..Well I stopped and moved the tape half a dozen times before I found the right place for my grip in its upper and lower range ..If you look close at my pics you can see the grip that I ended up sticking on my paddle..It's about a foot long to cover the two extremes of where I grip.
I found in flat water and cruise mode my top hand was fairly high..but when digging deep and going for it my hand moves down a bit..and when paddling in choppy water and into a head wind my hand then gets even lower because I had more knee bend and putting more of my back more into the stroke.
The top hand is also tricky...It's position depends on the paddle length..I've tried different length paddles and I can feel if my paddle is too long or too short..I like my top hand right in front of my face when I push forward with it and the point of most power..See my second pic for this position.
I think it's best for your paddle to be a little on the short side than on the long side because raising you top arm too much can lead to rotator cuff problems..So try and keep your top arms elbow pointed down instead of out.
One more thing to touch on...When paddling on the right side your left hand should be over the right rail of the board..and visa versa..Doing this will keep the paddle close to vertical allowing you to get the blade closer to under the board..and keep you going straighter.
Sorry about my long winded answer..You should try the tape on the paddle for the lower hand and see what you think...and try and keep your arms fairly straight..and kind of swing your lower arm through an arch and use the top hand to push for the power rather than try and pull the paddle through the water with the lower hand.
I hope others will also give their opinions on this.
DJ