2nd gen minifigs are not the most detailed figures in the world. Right? They are also small. So it might be easier to cut the hand off entirely. Then sculpt a new hand around a length of rod (brass, copper, florist wire whatever) and stick it to the figure.
Make a ball of putty (green stuff or sculpt) about the size of the figure’s fist.
Run the wire through the fist. It will stretch so you will be reshaping it with a tooth pick or knife blade.
Stick the fist to the wrist of the figure.
Note: When you cut the hand off, you might leave a little stump so you have sort of a pin to stick the new hand to. Definitely shave it down so it is thinner.
Years ago I used this method on my Napoleonic line lancers. My medium was glue…because I was 12 and had no money. I also used sewing pins as lances. I think putty is the way to go. So go get your sculpt on!
"Nearly all men can stand adversity, but if you want to test a man's character, give him power."