Preflop
KTs is good enough to play here, but its better to be the person opening the pot rather than limp-calling. It makes it much easier to represent a big hand postflop and it actually also tend to keep the pot smaller.
Flop
I can see merits for both calling and raising here, so maybe look to do a bit of both with this kind of hand.
Turn
Seems fine enough to take a stab at it, when he check to you. It allow you to represent a stronger range on the river and at least consider
bluffing, if you miss your draw. It also builds the pot for, when you improve. If I had the preflop betting lead, I would certainly dubble barrel this hand.
River
This is of course the interesting part of the hand, and its always difficult to not be results oriented, when you shared the result. So I recommend not doing that next time. Anyways I will do my best, and obviously you now made a flush, but you lose to a boat and to the nut flush.
So lets do some hands reading and see, how many combos of those, we think, he can have. Starting with boats would he really isolate out of position with A2 or Q2? I dont think so, so these hands got removed preflop. Would he check-call the turn with a set? That also seem very unlikely, so I actually think, its fair to say, that with his previous actions, he never have a boat on this runout.
That leaves the nut flush, which he can certainly have. However AhKh, AhQh and AhTh are not possible, because you hold KhTh, and Qh is on the table. I also think, most players would bet the turn with AhJh for value. The nut flush with a weak kicker makes the most sense for him as played so Ah9h, Ah8h, Ah7h, Ah5h, Ah4h, Ah3h for a maximum of 6 combos.
You are facing an overbet, but when your opponent has a maximum of 6 realistic combos for value, I think, you just have to close your eyes and put the money in. I understand, its uncomfortable, because this is a live game, and you are very deep, so its
real money unlike most of the hands, that are played online. But this is probably, what he is trying to take advantage off. His line of thought is basically, that if he bet 700$, you are unvilling to call with anything less than the nuts, and since he block the A high flush, he will only get called, when you have a boat.
And this is where, we need to go back to preflop and the reason, why its bad to limp. Because you are probably not limping AA or QQ. So your only boats here are 66 and maybe A2s, which mean, that if you fold a K high flush, then he can very profitably bluff you, even his bluff needs to work a large amount of the time.
Conclusion
By limping preflop you set yourself up to get owned on the river by someone, who presumably knew, what he was doing. So my main advice to fix this hand is to stop open limping in cash games. Its fine to sometimes limp behind, but there are no benefits to limp, when you are the first player to enter the pot. Also consider if its really benefitial for you to sit with 800$ in a 1/2$ game. It exposes you to being put in tough spots like this by players, who might be thinking about the game on a more advanced level than you. If you only had 200$ left on the river rather than 700$, I am sure, it would have been much easier for you to make the call. Or maybe he dont even attempt a bluff.