How to add e-signature option to form

also instead of them typing their name as a signature, I am wondering if there's a way to actually have them sign digitally.

Yes, that is possible by adding a Signature Widget Element to your form.

E-Signature: https://widgets.jotform.com/widget/signature
Smooth Signature: https://widgets.jotform.com/widget/smooth_signature

Adobe Sign: https://widgets.jotform.com/widget/adobe_sign
DocuSign: https://widgets.jotform.com/widget/docusign

I suggest you use the E-Signature Widget or the Smooth Signature Widget. The Adobe Sign and DocuSign require the users to have an account in the respective platforms.