"Terminals which have a "hold" rate of 15%. I thought that meant they had a payout rate of 85% which I still considered poor, but never really knew for certain."
You are right.
Look at it this way. 15% hold.
Put in $1-win $1
The next person that puts in $1 owes the machine 15¢ hold it did not collect from you and another 15¢ for the $1 he plays.
Compare that to Vegas local casinos poker machines, most payout between 97% and 99% with perfect play. Add your slot club points and you can bring some to 101% payout.