I heard my parents whispering last night.

Literal

Parents [subject-が] last-night whispering [object-のを] heard.

~のを聞く (to hear someone doing X) uses の to nominalize the ongoing action and を to mark it as the object of hearing — 'I heard [them whispering].' ひそひそと is a 擬態語 (state mimetic) for whispering or speaking in hushed tones.