What does an icon that looks like a pair of connected chain links next to a wireless network name mean

The spinning circle icon is simply a means of indicating that some network activity is taking place, i.e. loading new data in Facebook or Tumblr. It could even be background data access like updating apps from the store or if you have background refresh enabled for some or all apps.

It has nothing to do with which network is being used — for that, check the cellular/Wi-Fi indicator. If the Wi-Fi icon is there, then it's the Wi-Fi network being used.

It's also worth noting that apps can turn on and off the indicator at will, so it's not a 100% reliable indicator that data is actually being transferred. If coded poorly, an app could activate the indicator, but neglect to deactivate it in certain circumstances.

“Current Channel” means “Number of Networks Using the Current Channel”. Your current channel is channel 2. Your computer found 1 network that uses channel 2.

This is made more clear in the wireless_diagnostics log created by Wireless Diagnostics. There is a section that looks similar to this:

# --- Wireless Environment
    2.4 GHz Networks            : 14
    5 GHz Networks              : 0
    Current Channel Networks    : 6
    Recommended 2.4GHz Channels : [ 3 4 5 7 8 9 10 ] 6 2 1 11 
    Recommended 5GHz Channels   : [ 36 40 44 48 149 153 157 161 165 ] 

edit: I do not have enough reputation to comment on or downvote the other respondent's answer, but it is incorrect.