Chosen Solution

I can only hear people out of my Bluetooth headphones and not thought the phone itself.

It sounds like you may be having audio IC issues which is a common hardware failure with the iPhone 7 and 7 plus. This can only be repaired by someone with micro soldering skills. The price ranges from 75 to 150 for a reputable repair. I usually test this further by opening the voice memos app. Sometimes when the audio ic is failing the voice app will give an error that there are no audio devices detected.