It was Holt's third hat-trick for City as he surpassed the 50-goal mark for the club with a near-post finish, a penalty after Iron defender Paul Reid had been sent off, and a well-placed header to complete his treble.
Jackson came on to score a stunning hat-trick himself to condemn the visitors to a ninth consecutive away defeat.
The result cements second place for City and moved them six points behind leaders QPR.
Norwich handed a debut to young Liverpool striker Dani Pacheco who arrived at the club on loan deadline day.
Scunthorpe made four changes from the side beaten 2-0 at Ipswich last time out. Joe Murphy, Reid and Michael Collins started, while Ramon Nunez was given his debut after arriving on loan from Leeds.
The home side started brightly, with Marc Tierney slicing a shot onto the roof of the net and Andrew Crofts failing to trouble Murphy with a 20-yard drive which sailed over.
But the Canaries were ahead in the 10th minute.
Great build-up play involving Pacheco and Andrew Surman saw the Spaniard get to the byline and cut the ball back for Holt to slot home at the near post.
The Iron were struggling to cope with Pacheco as he jinked past his marker with a superb piece of skill, but dragged his shot inches wide shortly afterwards.
Nunez announced his arrival in the 19th minute as he unleashed a fizzing drive from 25 yards which deflected just over the crossbar as Scunthorpe looked to gain a foothold in the game.
But Norwich had two decent chances to double their advantage as Wes Hoolahan played in Surman and his angled effort crept just wide, before Hoolahan had Murphy scrambling to keep out a low 25-yard attempt.
The second goal came on the half-hour.
Holt was clear as Reid brought him down, and after the defender was shown a straight red card, Holt stepped up to send Murphy the wrong way from the penalty spot - his 50th goal for the club.
Nunez was taken off for Sam Togwell as the visitors looked to tighten up, but Norwich were rampant, with David Fox, Hoolahan and Holt all going close before the break.
After a quiet start to the second half, Hoolahan rattled the woodwork on the hour with a superb strike.
But the afternoon belonged to Holt as he completed his hat-trick moments later. Crofts' cross from the right was headed back across the keeper and into the bottom corner to make it 21 for the season for Holt.
Paul Lambert withdrew Hoolahan and Holt to rapturous applause with the game won, but that did not stop City from attacking, with Tierney forcing a fine save from Murphy from 12 yards.
Jackson came on for Pacheco and scored within five minutes. He robbed defender Michael Raynes and slotted past Murphy for his first goal in 21 games.
And he added his second just two minutes later with a neat near-post finish after good work from Henri Lansbury.
John Ruddy was finally called into action in the 89th minute as he tipped over a shot from Michael O'Connor, while there was still time for Jackson to complete his hat-trick with a clever close-range finish.