There are very real limitations of the CH physics engine. Generally things are controlled by one other thing - a parent/child relationship. You can adjust the connection type of the magnet, but if the hand is going up and down while walking I assume you really want the body of the wagon with gravity resting on the ground, and the handle/stick/rope from the wagon to the boys hand to adjust accordingly, sort of like two hinge joints (one at the hand where the magnet is, one where the rope/handle attaches to the main body of the wagon.
Bottom line is I am not sure if this will work as the two ends of the rope need to be controlled by different objects, and generally that is not supported. There has been the same problem putting a lead on a dog for example. Whatever the dog and person do, the lead should keep them connected. I have not seen a good solution - it is just beyond what CH can do.
I think ultimately you may have to settle with draggers / position transform with key frames and just manually line things up in two separate recordings for the boy and the cart. Or put a transform/dragger on the boy's hand so it does not move around so much so its more predictable with the magnet on.
Good luck! I would love the see the result if you get something going. Good to know for others who give it a go in the future.
Thank you, that's what I figured. It's a minor detail in a bigger piece, but the kind of thing I like to get right. For the time being, I "solved" the problem by having the child hold the wagon in his "away" hand. I may go back later and re do the handle as a separate element, atached to each point if I need it. With all of the other effects in the piece, it may be hidden.