Playing suited connectors

[Nikademus]

A friend of mine and I got into a disagreement about how I played this hand.

MP2: 28 hands - VPIP: 32.14 PFR:7.14
MP3: 55 hands - VPIP: 45.45 PFR: 9.09
SB: 9 hands - VPIP: 22.22 PFR:11.11
BB: 48 hands - VPIP: 41.67 PFR:10.42

PokerStars 1/2 Hold'em (10 handed) FTR converter on zerodivide.cx

Preflop: Hero is Button with 7[img]/images/graemlins/spade.gif[/img], 8[img]/images/graemlins/spade.gif[/img].
<font color="#666666">3 folds</font>, MP1 calls, MP2 calls, MP3 calls, CO calls, Hero calls, SB completes, BB checks.

The first discussion was about my pre-flop play. He insists I should have raised, to limit the field. I think I got to see the flop cheaply, and was hoping for a monster.

Flop: (7 SB) 9[img]/images/graemlins/club.gif[/img], T[img]/images/graemlins/spade.gif[/img], 5[img]/images/graemlins/spade.gif[/img] <font color="#0000FF">(7 players)</font>
SB checks, <font color="#CC3333">BB bets</font>, MP1 folds, MP2 calls, <font color="#CC3333">MP3 raises</font>, CO calls, Hero calls, <font color="#CC3333">SB 3-bets</font>, BB calls, MP2 calls, MP3 calls, CO calls, Hero calls.

Great flop for me. With a flush and straight draw, I'm not going anywhere. A 6 gives me the nuts, a J gives me the ass-end of a straight, and a spade gives me the flush, but with concern.

Turn: (12.50 BB) 6[img]/images/graemlins/diamond.gif[/img] <font color="#0000FF">(6 players)</font>
SB checks, BB checks, MP2 checks, MP3 checks, CO checks, <font color="#CC3333">Hero bets</font>, SB calls, BB calls, MP2 calls, MP3 calls, CO calls.

Got the nuts, but no action. Didn't lose anyone. Please no spade...

River: (18.50 BB) 2[img]/images/graemlins/spade.gif[/img] <font color="#0000FF">(6 players)</font>
SB checks, BB checks, MP2 checks, <font color="#CC3333">MP3 bets</font>, CO folds, Hero ....

This is where the second issue came up. With 3 to act behind you, do you call or raise here? What will make you the most money, or are you beat here?