People often equate SHA2 as being SHA256...
Do they? While this is not fully true it is not fully wrong: SHA-256 is part of the SHA-2 family which also includes SHA-512 and others. See What is the relationship between “SHA-2” and “SHA-256”
... so then would SHA be 160 bit? AKA SHA1?
SHA is originally not SHA-1 but SHA-0. From Wikipedia:Secure Hash Algorithms:
SHA-0: A retronym applied to the original version of the 160-bit hash function published in 1993 under the name "SHA". It was withdrawn shortly after publication due to an undisclosed "significant flaw" and replaced by the slightly revised version SHA-1.
Despite this SHA-1 is often simply called SHA, like in cipher names like TLS_RSA_WITH_AES_128_CBC_SHA.
Does a depreciated SHA1 mean one should consider disabling SCHANNEL\Hashes\SHA?
This setting seems to affect the availability of SHA-1 in older versions of Windows (up to Windows 2003). But not every use of SHA-1 is bad. While it is no longer considered secure enough to be used for signing X.509 certificates used by TLS it is still considered safe to be used as HMAC as used in ciphers like TLS_RSA_WITH_AES_128_CBC_SHA. See Will Google block HMAC-SHA1 along with SHA1 signed certificates?. Thus, disabling SHA-1 in general using this registry key is not recommended (but it is probably recommended to use a newer version of Windows than Windows 2003).