Sewing from a pattern, I need help understanding the hem allowance...........?

Ok im sewing using my first pattern. On one edge it saw 2 and 1/2 hem allowance however on the sides with the dotted line (like the one that is suppose to show the seam line i guess) its now 2 and 1/2 inches its like 1/2 of an inch. and I think 2 and 1/2 inches for a seam allowance is wayy to much. Does it just mean on that one side? I dont understand???? please help