I am a bit confused about hashtag tagging. Is it possible for user to be able to use hashtag to tag documents? I know how to use termset but I am not sure how to configure a site column to term store so the user can use # to tag any one word.
Hashtags has been retired but still visible. Enterprise keywords is the preferred way.
then go into your term store from the admin centre to add terms in that you wish to use...direct link https://yousitehere-admin.sharepoint.com/_layouts/15/online/AdminHome.aspx#/termStoreAdminCenter
Here're steps to tag documents:
1.Create terms in the Term store management.
2.In the terms usage settings -> Enable Available for Tagging.
3.Create a managed metadata column -> Use the newly created term in the managed metadata column.
4.In the managed metadata column -> Choose term to tag documents.