The Babe is more than swadling Bands; Throughout all these Human Lands.
Blake is stating something obvious: a baby isn't the same as the blankets he or she is wrapped in. Everybody knows this, Blake says—no one in any "human land" is going to deny this. So, Blake means to suggest, why don't people think that humans are more than what they physically appear to be?
As a radical Christian, Blake believed that there's such a thing as a spiritual body or "imaginative body"—the body in which Christ was resurrected—but that it's different from the physical body, and is really the same thing as the soul. Blake liked to call the physical body a "vegetable body," meaning that it grew out of the earth and would eventually decay back into it. Ashes to ashes, dust to dust.
He talks smack against people who he thinks are distorting Christianity, writing in his masterwork, Jerusalem: "I know of no other Christianity and of no other Gospel than the liberty both of body and mind to exercise the Divine Arts of Imagination—Imagination, the real and Eternal World of which this Vegetable Universe is but a faint shadow, and in which we shall live in our Eternal or Imaginative Bodies, when these Vegetable Mortal Bodies are no more."
In this little couplet, he's basically making the same point—that humans are spiritual beings and not just physical things—but in a much shorter, less elaborate way.
Tools were made, & born were hands, Every Farmer Understands.
These lines continue the rhyme from the last two lines—which probably indicates that we're meant to connect them, or read them together.
The last couplet was talking about how babies are more than (and, actually, totally different from) the swaddling bands they're wrapped in—implying that humans are also more than the physical beings they merely appear to be. They're spiritual beings, and reality itself is spiritual.
This couplet continues with that theme—it draws an analogy with a simple fact that everyone agrees with: "Tools were made, & born were hands." Almost no one is going to object to that—a hammer isn't typically the child of a mother and father hammer, and an actual human hand is usually attached to a human who was born to human parents.
So, what's the point? Is Blake just stating conventional wisdom that everybody already knows? Nope. This is the analogy he's making. In the same way that hands were born and tools were made, the inner selves or souls of humans are born—they're created from the spirit. But the outer selves of humans, the bodies and brains that go out into the world, are a part of nature—they were "made" by nature, and they'll ultimately disintegrate back into it, decaying to dirt. They're like "tools" the spirit uses to live and work.
Blake's suggesting that it's funny that every farmer knows this—but people don't usually see the spiritual nature of reality, or understand what it's all about.