2/2 Flop a huge wrap, but we are deep

This deep would lean call, because hero's hand can be dominated by kqtx and qtxx hands. But really this is the type of spot where b/c, x/c, and x/r are all very reasonable lines if player knows how to navigate turn and river (technically) at this stack depth. Lots of good ways to extract value from weaker players here, but we don't know much about them from OP, even if UTG is aggressive, thus we prioritize the unblocking properties of Hero hand, and give villain lots of to and middle sets in limped pots.

If I'm not betting, I'm 100% calling, with some dominating hands and no pair. We have so many beautiful turn binks, the 5 7 of clubs or hearts give us the nut straight plus flush and straight redraw, whereas the T or Q of the other suit gives us the second nuts facing a potential flush redraw. Lots of reason to wait until a nice turn before we get aggro. KQT ain't folding if we get aggro; 578T might. If the board pairs the turn we can just pitch it and be very happy. Raising might be spew, particularly in a limped pot where sets will be more frequent.

Just call. On the turn we will have a well defined hand that’s easy to play.

Saying your hand is a "huge wrap" is an okay way to say it, but not all huge wraps are the same. From Hold'em we all know the open ended being the best, but for Omaha wraps come in many forms (I'll try to get them all)

20 outs with 14 nut outs HERO
17 outs with 11 nut outs
17 outs with 07 nut outs
16 outs with 16 nut outs
16 outs with 06 nut outs
13 outs with 13 nut outs
13 outs with 07 nut outs
13 outs with 03 nut outs
12 outs with 12 nut outs
09 outs with 09 nut outs

Not all wraps are the same. Only the 16 out with 16 nut outs has more nuts than you. If you are not going to get spicy with a 20 out wrap with 14 nut outs, then you are never going to get spicy. Also since most people can't seem to find when to donk, I suggest figuring out how to be a damn good check-raiser and know ahead of time how your check-raising range is constructed instead of trying to do it in game.

FURTHERMORE...the board is rainbow meaning your huge straight draw is not endangered by a flush draw.!!! Seriously you and I need to discuss you eating more spicy food.

Call

I would raise this deep - puts a lot of pressure on our opponents and we have nut outs.

Now do all the same but with all the different ways you can be up against 1 or 2 flush draws but have some of the blockers in your hand

I think I like leading here from SB, as played call seems better than getting it in against a set+straightdraw or pair+wrap

Just call. Too deep to gii on flop, I think.

When someone bets in 5ways and u unblock all value made hands, being on the worst position-at the table- SB, it is viable for us to play it cautiously, because fold equity is diminished vastly and we are flipping at best vs value range. So pumping up the pot with 50% eq at best oop isnt the best strategy. If you wanna spice up this spot do it with nut wrap like KQT8, where all your outs are good. With QT87 multiways you are kind of deadish on some runouts so with non nutted wraps you prefere to be against one player, no 4 villians.

A long time ago, way before solvers, an old schooler around here pointed out the value of the ten and the five in making straights. You can't actually make a straight in the great game of pot limit Omaha without a ten or a five. Think on that for a moment.

Different, but related topic for a moment, there is a vast difference in paired boards if the top or the bottom card is paired. QQ7 is nothing like Q77, but most think it is the same. It ain't even close, but most don't see it or understand it.

Back on topic, there is a vast difference between the ten being on board or in hand. It ain't even close, but most won't see it. Saying you need the 16 out wrap with 16 nuts instead of the 20 outs nut wrap with 14 outs as a qualifier is silly if the ten is not on the board. Both are essentially the mortal nuts and fearing the opposite while you block it by having one of the only four tens in the deck is fearing monsters under the bed. Also saying you need 16 nut outs instead of 14 nuts outs when you also have two backdoor flush draws on a rainbow board is like saying you need a cannon to fight a mosquito. Some times you have one flush card in your hand as a flush blocker some times you have two of a suit in your hand not hoping it actually comes a flush and instead you have two club blockers and two heart blockers on a rainbow board.

And as I and K2AA72 pointed out, we are only here with the late position person betting because hero didn't bet flop. I said learn how to lead or learn how to be a damn good check-raiser. It is rather silly to put a lot of weight on "late position bet into 5 players." Wait what. Late position bet after no one else did. That isn't the same weight as an earlier position person actually betting into others. Hero would correctly be the one putting caution in the other players had Hero lead flop.

On a paired flop,

xxy and xyy are not even close to the same animal. If you are not seeing the difference, understanding the difference and playing them differently, then you have room for improvement.

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On a rainbow straight draw flop,

boards with a ten or five on board are vastly different than boards without a ten or five. They are not even the same animal. If you are not seeing the difference, understanding the difference and playing them differently, then you have room for improvement.

So most people seem to understand it's a call. What happened in the hand?

Agree this is a call or possible lead but I have a pre flop question.

I usually play in very loose $5 BB games with only UTG straddles to $10 allowed. Only about half the pots are raised (and often less than pot) and three bets mostly means good aces. Once the game gets going most players (including me) are $800 to $2500 deep with an occasional $300 or so short stacker. To me double suited (or single suit) hands without nut suits are very overrated. With a button staddle here the very small blind is super early position both pre and post flop. QT87 has both gaps up top and I'd easily ditch this in early position in my game (but I'd call an unraised pot in a blind). Of course it's an easy call late position after several limpers or on the rare occasion I'm first to open late it's a raise (or an isolation raise against a single limper very late but this is rare in my game).

OTOH I'm very loose getting in for cheap or relatively cheap from late position as long as my hand has some nuttiness which this one does with great flops. Along this line of thinking I think small pairs are trash and consider any pair below nines to be a defect in loose games.

Am I playing way too tight? Would anyone else fold this hand before the flop?

As an aside I agree with the poster above who looks as small suits in your hand as blockers to nut or big flushes in multiway pots.

Well, ds-hands with no nut suit play poorly multiway. Obviously SB needs to play very tight here and I don't hate folding. It's possible to play without opens and limp-rr more hands. I think this is a decent candidate for that, too.

Ds hands really don't suffer anywhere near as much against thise who play too loose.

I mean yeah there is a decent chance your T-high fd is good multiway if people play most hands and perhaps people won't bluff high flush cards enough.

Raise.
The problem here is that some of our outs and all BDs are not for the nuts. We might even split the pot with our nut straights.
To diminish the risk of losing to a bigger straight or flush we need to reduce the field. This can be done by raising, squeezing the players behind us (who, without our raise, are getting a good price for calling) and the caller in front of us.
Our raise has other benefits, it makes our play on the turn and river much easier: if someone reraises, we know he has a set ; if no one reraises, deception is on our side.
The only drawback is that we can face a reraise and will be playing a bigger pot out of position.
With this hand, even out of position, I’d rather play a big pot HU than a smaller pot multiway.

There are essentially always more than just one drawback to a play, and you need to explicity compare the drawbacks and benefits of raising to the drawbacks and benefits of just calling.