Pretty sure it's hydraulic. I bet a 5 foot hog is more than a handful.
The PTO is gear driven off the engine. The hydraulics run the hydrostatic transmission, the 3 point hitch, front end loader, and rear remotes if you have them.
Here's a description of a PTO from Wikipedia:
"A power take-off (PTO) is a splined driveshaft, usually on a tractor or truck, that can be used to provide power to an attachment or separate machine. It is designed to be easily connected and disconnected. The power take-off allows implements to draw energy from the tractor's engine."
I'd be a little worried about CT120 with a 5 ft tiller. I have a 5 ft tiller on my CT225 and I don't think I'd want to give up that much horsepower. Just my opinion.