Playing against the O'Kelly variation of the Sicilian Defense

I played the opening poorly against a player rated more than 200 points above me. I would like to know how I should have played the opening better, and whether I could have done anything to improve my position in the middlegame before I made a blunder.

5. e5 is a french defense advance variation where black would rather have a tempo for a move other than a6, so that would have to be a fine choice. 

I thought about that, but since I have never played the advance French I decided I should avoid it. I should have mentioned that in the annotations.

The advance french after 5e5 is quite ok for black, who can play Bd7-b5 making use of a6,

e5 would have been very helpful and as others said, you'd have transposed to the advance variation of the french defense.

7.Qb3 has to be wrong, that's just accepting you've got a worse position. Your d4 pawn isnt actually under threat yet there anyway as there would be a typical Bb5+ motif at the end of the sequence winning his queen. Simply taking on d5 and Re1+ looks rather inconvenient for him; his queen is somewhat misplaced.

Black just gets a good Boleslavsky Wall structure after 3. d4.

You beat me to the punch

I was under the impression that black was a lot worse in this line:

I didn't see the Bb5+ line. My chess vision is poor.

What exactly is wrong with 3.d4?

I mean, its the third move of the game.

This is what happened when I played 3. d4:

@IMBacon 3. d4 is accepted by modern theory to be not optimal.

3. c3 is usually recommended if one wishes to 'punish' black, since Black finds little use out of  a6 in the Alapin pawn structure. However, if you don't play the Alapin, I believe 3. Nc3 forcing black to transpose to a more orthodox line is the most practical decision.

Why would you purposefully play something not optimal when there are clearly better alternatives? The O'Kelly is a one trick pony --- avoid their 'trick' and don't play 3. d4, and you will be a happy camper.

You may not believe it, but there are people out there who want to play a Sicilian but are not too keen on learnig theory heavy lines like the Najdorf for example. And the O'Kelly is playable even if white avoids.

Don't beat yourself up over it. It is something you have to develop. I see it now. But there was a time when i didn't.

If you don´t play the Alapim you shouldn't play 3.c3. You can play 3.c4 and play a Maróczy bind or 3.Cc3 and transpose to a normal game

I think after 3. c3 black’s most interesting practical option, as played by Alexander Fier, is d5 4. exd5 Nf6 where black seems fine after 5. d4 cxd4 6. cxd4 Nxd5. White has deviations on move six which are more critical IMO