I don't have a hand history as I played this hand (horribly, I might add) over at a friend's. But my memory will probably be adequate.

The tables are 10/25 and I was making a move against an extremely loose/aggro player in position. He was in the BB and I was at the cutoff when I raised with 7 8 suited (diamonds). First question: Normally a fold preflop hand out of position, but against an extremely loose player (let's say about 35%-45% hands VPIP), would this move be ideal?

Now, the button folds, SB folds, and the BB calls. The board comes A Q 7 (all clubs). He leads out with an oversized pot bet. I believe I really shot myself here. I was thinking fold, fold, fold but I reraise him 3x. The question here isn't the move (because it's a horrible move) but rather, does the oversized bet the loose/aggro made seem like hes trying to protect against anymore club draws or is he trying to extract more value? If he had the King of clubs and he actually flopped it, would a player such as that lead out?

Any stack sizes or anything? Need to know how much money we are working with

First, I don't mind raising from the CO with a suited connector.
Other people are going to say it's a bad play.
That being said, if you watch, the good "loose" players aren't calling raises nearly as much as they make raises.
Bad loose players call raises a lot.
Which is he? That will tell you about his range.
We can't know the suits, but we can define his range.
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Anyway, so we get our flop.
I would overbet a single pair hand like non-club AK AJ on that board if I were the villain.
I would underbet or even CR with a flopped flush, given that you had raised PF.

Raising PF is good, never fold there when folded to.

Flop is a definite fold for me.

From the session, he was calling a lot of raises and I did not see him reraise once. What kind of range can we expect? How likely is it that a player of that aggression/looseness shows up with a weak ace?

The stacks were about 90x bb, more or less.

Thanks for the input guys.

I love opening from late position with suited connectors. The hand is generally well disguised and people tend to overvalue their hands when they connect to the flop assuming you're merely making moves. At least that's the story at full ring.