My issue was resolved by deactivating the FluentSMTP plug-in that i had recently activated. It was interfering with both Contact7 SMTP as well as our woocommerce webstore mail processing. Turns out the FluentCRM, FluentSMTP and FluentFORM plug-ins had not yet been tested with current WP version. Obvious lesson: make sure plug-ins are tested before using and rollback to state when things worked.