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What should I have done differently? Looking back at this I think my flop bet should have been bigger.

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Yes, at least 3/4 the pot.

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But I don't think LAG MP1 folds here even if it was pot sized.

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Agreed, but you're most likely ahead. Build a bigger pot.

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I know I am just anticipating possible comments here, such as fold the turn.

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You're pot-committed. You only had to call $6.75 to win $37.10 (5.5:1). You're behind (14:1 dog), but he's loose. He could be making this play with KQ, maybe KT. I think you were correct in calling.

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But this is my problem with poker. I can't understand why someone would call a 6xBB PF raise OOP with KJo. And I always seem to want to call to see the 3 outer suck out.

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He was drawing to 2 outs and he got lucky. The villain made the mistakes in this hand (not you). He got lucky this time, but you'll get your money back from him soon enough.