I'm finding that I have trouble defending blinds and that I suck at playing OOP, I play too passively and seem to lose money with hands like AJo/KQo

Villain is 46/37/16.4 (3b) with an AF of 5.2 and cbet flop of 92%

So how about my peel on the flop and the subsequent lack of bruff on the river because I don't fold anything?

Should even peel with overs on the flop OOP? Or is this a "c/f always" spot? Can we c/r with our current holdings?

Full Tilt No-Limit Hold'em, $1.00 BB (5 handed) - Full-Tilt Converter Tool from FlopTurnRiver.com

MP ($100)
Button ($229.40)
SB ($118.90)
Hero (BB) ($105.60)
UTG ($105.10)

Preflop: Hero is BB with K, Q
2 folds, Button bets $3.50, 1 fold, Hero calls $2.50

Flop: ($7.50) 4, 2, 7 (2 players)
Hero checks, Button bets $5, Hero calls $5

Turn: ($17.50) 7 (2 players)
Hero checks, Button checks

River: ($17.50) 2 (2 players)
Hero checks, Button bets $5, Hero folds

Total pot: $17.50 | Rake: $0.85