Hello,
Couple of things to start with, 'rolled up' holiday pay (where an amount as 'holiday' is included in your hourly rate) is now illegal and has been for a few years, including for flexible and 0 hours workers, so your boss definitely needs to change that if nothing else...
www.gov.uk/holiday-entitlement-rights/holiday-pay-the-basics
Plus also it sounds a bit as though you might already meet the definition of an employee rather than being a worker if you are given regular hours of work which you don't have the choice to turn down, regardless of what your contract actually says:
worksmart.org.uk/work-rights/pay-and-contracts/contract-terminology/am-i-worker-employee-or-self-employed
As to how you approach this with the MD, I would try and keep things simple and factual, don't accuse him of deliberately breaking the law or being unfair or anything, but lay out that you've been in the role 7 years, things have obviously changed a lot in this time, including some legal changes and there is now a requirement for you to work x number of hours per week/month on y important tasks, and you feel it would be better both for the business and you personally to formalise your current arrangement into a regular employed contract. Make sure you lay out the benefits to the business in them taking this approach, ie they are getting a commitment from you for your time (whereas technically under this 'flexible' contract you could just refuse the work), less timesheet admin if you were to do regular fixed hours per month, and also dealing with the (inadvertent) illegal holiday pay issue.
Re the salary for the role, it's less relevant what other employees in the company get paid if they do different roles to you, and more what a fair market pay rate for your job is in your area and for someone with your experience. I would do some internet research and look at job adverts for comparable employed roles and look at what they pay (not so you can threaten to leave but as evidence of what the market rate is), perhaps even talk to some recruitment agents working in the field to establish what you could reasonably expect to be paid for your role in another company. I would then use this information to set a figure in my mind of what I'd be happy to take (bearing in mind any plus points that maybe make it better than other companies e.g. convenient location, good flexibility, other benefits if they offer them) and then probably open negotiations a touch higher than this to allow some wiggle room. There's no need to be aggressive or rude with your boss but do be assertive and don't undervalue yourself and what you've brought to the company over the years... it sounds silly but can you 'rehearse' saying some key phrases before the conversation, either into a mirror or with a friend/partner? E.g. 'A comparable market salary for the role is £x', 'I'm afraid that won't work for me, what I need is x' etc.? It's a bit cringey but I find saying things aloud seems to really cement them in my head and less chance of me getting flustered and tongue tied in the heat of the actual conversation!
Good luck!