I would be very grateful of any comments in the way I played this hand. How bad was it, was it bad at all??

$100nl 6 seat cash table

Opponent is a very good player, as are all the players at this table. Probably the toughest table I have ever been involved in. I am just about to leave as I am dealt this hand. Opponent is not quite as aggresive as others in the game but he is capable of making moves, he has been quiet today. Like me is maybee playing a little scared.

Opponent is in 1st position and has $103
Im in 2nd position and have $137

1st position raises to $4
I am dealt and I just call. I fully believe I am ahead here but it is the first time I have seen him raise first to act. I will also have position on him throughout the hand, and there are 4 dangerous players left to act behind me.
Pot is $9.50

Flop comes

1st position bets out $6
I raise it to $17
After a while of waiting he reraises me to $37
I fold.

What would you have done differently here? Due to the danger of my opponents behind me is that even more reason to raise pre flop? Or do you not mind the flat call? Do you raise on the flop to see where you are or do you call? Do you fold to the reraise, the amount he raised does still allow him to get out of the hand. Bear in mind his thinking though a tight player (me) has just raised him, although maybee he thinks due to my tightness I fold KQ to a reraise??? Due to much tougher opponents lately I belive I am being "run over" a little, any replys would be a great help.