I like Debian
Homelab
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Manjaro for AUR
Debian, always debian for server type things, BUT, it might be more versatile to put VMware ESXi on it. (or Proxmox)
https://github.com/itiligent/ESXi-Custom-ISO
This repo has working scripts to inject into the ESXi installer ISO with all the drivers you need to get your NUC running as a virutalization host. (Recently VMware was aquired and all the community driver sites were taken down, so other online build tools stopped working)
I run a homlab with a cluster of ESXi NUCS , its just sooooo useful especially when developing code for differnt platforms or just quickly learning things and tinkering about.
See a search engine and do some research. Maybe try out a bunch of different distros and find out for yourself
Debian 12 on the bare hardware (which I think is 2c/4t) and then setup Docker. You can also then run KVMs if you want. QEMU will be your friend.
If you had a newer, faster NUC, or similar, Proxmox as the hypervisor and then Debian 12 as VM with Docker on it. You get LXC with Proxmox "for free," ( LOL ) so that kinda rocks. Two cores is not really a decent speed point. And it needs 8GB of RAM to be useful in that case. I **think** NUC 7 doesn't normally have that, but I don't NUC much--I used minipc non-NUC "clones." For lack of a better word.
Have a nuc7i3
I put proxmox on a usb, installed it (official)
Download a Debian lxc container and boom Debian host