The Mahindra XUV 7XO is a well-rounded product, and the AX7 T is the variant to choose as it offers all the premium features you would expect at this price point. You get a 16-speaker Harman Kardon sound system, ventilated front seats, Level 2 ADAS, an electronic parking brake and much more.
As for whether you should opt for AWD, it really depends on your usage. If you live in the hills or regularly drive on challenging and slippery terrain, the AWD version can make sense. For most driving conditions, however, the Front Wheel Drive version will do just fine.
If your idea is to get into serious off-roading, the 7XO is not the best choice, even with AWD. For that kind of usage, the Mahindra Scorpio N or the Mahindra Thar Roxx, with higher ground clearance and a low-range gearbox, will be far more capable.