Replace my Marantz AV7702mkII?

does the 2 chan pre need to be on when watching a movie? I think so, but that means a tube pre is kinda out of the question

Well, yeah, but you don’t have a tube option at all using only a prepro, right? The point is, even a good solid state stereo preamp will likely provide better performance — and give you a ton more potential options — than using the prepro for stereo and would also allow you to just keep using your Marantz for HT duties.

If you want to use a tubed stereo pre there are a few that don’t require to be powered on for HT (maybe VAC, Backert, Rogue?) but not many. Another way to look at it is that if you find a tube pre you really like the tubes in many tube pres can last thousands of hours and aren’t necessarily too expensive to replace so may still be a worthwhile option for the benefit enjoying some tube magic.

For hookup you only only need to run the front L/R pre outs from the Marantz into the stereo pre and connect the stereo preamp to the amp powering your front L/R speakers and you’re pretty much done other than plugging your 2-channel source into the stereo preamp. Only requires an extra pair of interconnects. Hope this helps, and best of luck.

I live in a condo I don’t have the luxury of multiple dedicated listening rooms, I need to compromise.

Good news — you absolutely do NOT need to compromise.  Keep on using your Marantz for HT and seamlessly incorporate a dedicated stereo preamp into your existing system.  For critical 2-channel listening the prepro will be completely out of the signal path, and you can switch between HT and stereo by pushing a button.  If this is of interest I can go over the connections, but it’s exceedingly simple and many of us here have used this setup before we got dedicated listening rooms.