I've raced and spectated the 70.3 in Boulder two separate years and didn't notice drafting issues though that doesn't mean much.
Altitude, will start by saying that everybody is different BUT:
- the swim - yes you'll really feel it, but if you do a shake out swim to get used to that feel, it's not bad on race day. My husband and I swam our normal times there, and my IM swim PR was at Lake Tahoe, so I don't think this has to be an issue if you're mentally prepared
- the bike - less air resistance at altitude is great for smaller cyclists like myself, my full and half bike PRs are at altitude
- the run - you feel it more at the more intense paces, so should be less of an impact to IM pace than for shorter distances, the bigger issue as someone mentioned is that the heat and sun intensity are amplified at 5k ft. I would worry more about how you'll combat that than the O2 effect (since you can't do much about that anyways :)).
Science says that ~48 hrs is good window to arrive pre-race, before your body acclimates, which is what I've done in the past when racing at altitude, and it hasn't been terrible. Takeaway: get there 2 - 3 days out from race as you normally would vs trying to do a week early to acclimate - giving your body that 5-7 days is actually worse since the process is underway.