At low stakes I would be much more inclined to play an exploitative/exploitable strategy than worry about taking the GTO line.  Even against unknowns, I would prefer taking the line which I think exploits the weaknesses of the player pool at that limit rather than looking to be perfectly balanced/GTO. Against know opponents, I would be focusing on their style/weaknesses. 

Taking your AK5 rainbow board, I think the key questions would be (a) what is his defending range and what boards is it likely to hit hardest, (b) what proportion of the time is he c/r on the flop (c) what proportion of the time is he c/f against a c-bet. 

If you have few hands on "nemesis", I'd generally be giving him credit when he c/r flops like this at low stakes.  If he is clearly attacking certain flops aggressively by c/r then you can think about adjusting by checking back more when you have a good reason to do so (i.e. he's making you fold hands with decent equity that can't stand a check-raise). Defending with a wider range v. flop c/r is going to be very villain dependent IMO and I wouldn't be doing it as standard vs the low stakes player pool.  

So, basically, I would be looking at 3 adjustments:

1. Cbetting less against agressive c/r opponents (I'm sure not c-betting at all is wrong). 

2. Defending lighter against loose c/rs.

3. Opening a tighter range against tough players who are going to defend aggressively.

There are many posters (way) more qualified than me to comment on the applications of GT at low stakes so I'll be watching the responses with interest. 

My question is, how worried should we really be with balancing our range in spots that rarely come up for ex. getting craised on AK5r when we are UTG and our Villan has flatted in BB my uneducated guess is we should worry more about whats the right play in the moment than what is the optimal range balance play in a vacum because this spots are super rare and villan probably doesnt even notice this or think that deep about it, which leads me to conclude that its hard to find the right balance betwen balance and the most +EV play.

I`ve noticed with my play that I often times put too much effort in trying to be balanced and it has for sure cost me money in the long run

You manage your ranges depending on the circumstances, range is something that exists if the villans think about it, I am trying to say that it is impossible to fully understand a range because it is not an exact thing, so imo the GTO approach is to manage your range depending on the villain.

What happens to the GTO approach when villain doesnt know GTO?

I think one of the biggest mistakes is to watch mid/high stakes videos/strategy and try to play the same as the pro's. The key is to always adjust to your opponents. If they are super passive and you can get away with cbetting alot, just do it. If they can't lay down their low flush on a flush flop with you showing agression why even care about 'repping' a range? Sure, if you are at a table full of regs you have to think more but that means you have poor table selection. Don't think that they think that you think that they think that you think blabla. Just play ABC poker. 

I think it's fair to ask the question, regardless of what stakes we're playing.  Any questions that can lead to a better understanding of PLO have to be good questions in my mind.  At the micros I often find myself wondering "is this guy drunk?".  When plays are irrational to the point of being almost impossible to read, I find it useful to think about what the GTO play might be.  Not necessarily because taking that line is best, but just to understand what a reasonable line under any conditions might be.

Cbetting in particular is something that I've thought about a lot lately.  It seems super simple, but when you think about it, the decision whether to cbet the flop or not often defines how the whole hand plays out.  It defines how the opponent will respond, not only on the flop but also on the turn and river.

I'm curious to see what this thread comes up with.  I don't have the answers myself.  What I have noticed though, is that there are many indications that GTO play is possibly more passive than many of us are used to.  When snowie for nlhe first came out, many were surprised at some of the plays that seemed overly passive.  Matt Janda has been producing some GTO related content and seem to come up with some fairly surprising check-call lines.  And I've heard it mentioned in many other situations, though usually for NLHE.  Whether or not it's correct still remains to be seen, but there are enough indications out there that GTO play may be more passive than some people think.

The other interesting (and obvious) adjustment GTO may bring is to use the full spectrum of bet and raise sizes.  The best players use bet sizing very effectively to gain an advantage, and yet I think this area is probably still very much under explored in PLO.

Was thinking about "3." a bit. A pure air hand gains most from villain folding and has close to zero chance to win a showdown. PLO air can win a showdown sometimes. So it should make more sense to check back PLO air first.

After skimming through related midstakes posts I have some guesses about "2." (- the our range is weak thing). I think we could make two cases - when our opponent's range is weak too and when it is much stronger than ours. If we both have weak ranges either player's incentive should be to keep the pot small. Because there are very few strong hands out there my favorite would be "2.c)" (check back entire range) for that case. I am thinking of low lockdown boards for example, that often miss both players ranges completely. When our opponent's range is stronger than ours we have to accept the fact that we have to give up frequently. I would favour "2.b)" (cbet sometimes and check back a lot). We still cbet our value hands, because it is likely we get action, but check back a large part of our weak hands and fold them unimproved OTT.

I still have no idea if/when to apply "2.a)" and if it is a valid game theory concept at all.

This is a great question to be asking yourself, you are on the right path towards improving as a player.

GTO is always a concept that creates what seems dull discussions, mostly from people who aren't interested in GTO because they only view poker as a strategy game where the most important thing is to make money as fast as possible, thus finding the best games and exploiting their opponents becomes their #1 priority. That's all good and valid, we all want better winrates and less variance, but, at least for me, exercising extreme bum-hunting can turn poker on too much of a grind.

For this reason, I (and encourage everyone to do the same), from time to time, play heads-up against better opponents and force myself to think about how my ranges could be exploited, knowing a superior player will find my leaks. I then value these investments very heavily, because I know I'm losing money in that situation, I exhaustively analyze each and every hand I played vs him‎.

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To answer your questions, we can't talk about a gto strategy without a math heavy response, after all, gto is a mathematical concept. But before we get into math, given that there are no numbers in OP to do math with, I'd like to point out a few things:

1. For the most part your assumptions seem correct. However, the reason we skip c-betting our bottom range oop it's because these are the hands with less equity in our range and we don't have the required fold equity to be able bet our whole range profitably. For the same reason (more equity and more fold equity - by blocking pairs/two pairs/sets, etc...), we include our mid range in our c-betting range. Equity is your best friend, use it adequately.

2. First of all, when talking about an AK5r board texture, there's no way blind's defending range is stronger than your opening range. Keep in mind we need to estimate a 3-betting range of mostly high card hands, thus weaking blinds defending range considerably. That's the reason why this isn't a board texture where you should be extremely worried about getting check/raise frequently, he just shoudn't do it, if he does, then you need to figure our how to exploit his extremely weak range on this spot.

In order to estimate our c-betting frequency and bet sizes (to later determine how often we need to continue vs a c/r of X size) we first need to analyze the flop hand categories break-down of both players, to accurately determine how often they have different clashes of hands.