[joewatch]

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Fold to the raise preflop out-of-position and a poor wrap hand. The rest of the streets you played fine.

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Hi Joe,

What turns it into a good wrap hand - if the 7 is an 8?

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Without a doubt, a 8 would greatly improve this wrap hand. Also, being double-suited might turn it into a call for me.
Other things you have to consider - Villain's raise puts him on high cards, so your broadway str8 draw is greatly weakened. If you look at win % vs. high pairs like AA, KK, the lower wrap hands do better.