If they can't understand hashing then there's no hope of teaching them security so why even bother?
What Rich has done amazingly well here is use the correct term, but then made the “magic” analogy that allows the concept to be more easily understood by people not within engineering. Think sales, marketing, HR, biz dev, etc.
For those who are interested, they can look up more about hashing afterwards. But for everyone, the concept of how hashes are used was taught with high retention rates.
Ie, the value isn't in the word choice itself, but rather in signalling that you empathize with your audience's discomfort.