How did I lose having Flush Ace against flush 7? Thats impossible if the guy hasnt got a straight flush
You fell into a simple trap that all newbies make when playing Omaha, Thinking you have made the nut flush when the realism is that you didn't. The important difference between Omaha and Holdem is in Holdem you can win by playing one of your two cards, In Omaha you have four cards and you must play two of them and only two.
If you are dealt 4 Aces straight out, it looks a great hand but the fact is you only have one pair of Aces with nothing to look foreword to, all the Aces have been dealt out and you can only play two cards so no way to make Trips or 4 of a kind, certainly no flush possibilities or even a straight. The villain could be sat with K,9,7,2, in his hand and still beat your Possible full house if three 7s hit the flop, because he would have four 7s with a king kicker.
Omaha is a great game and personally I prefer it to Holdem, but many first timers fall into this trap.