7i96S card arrived what setup is recomended

So the fault pin is only cleared when the drive is re-enabled?

If so, you might need some hal logic (and + ones-shot perhaps) to mask the error until a bit after
the change to machine-on state

So the fault pin is only cleared when the drive is re-enabled?

That sounds about right and the fault is preventing me from clicking the machine on in the ui.

So should something like this work:

Expected result would be, the alarm triggers the oneshot, which then triggers the amp-fault-in and in turn turns off the machine. The fault is also cleared 0.5s after the oneshot fires thus allowing me to turn the machine back on an clearing the ALM signal.

I'm not sure if auto resetting makes sense. Often the alarm is raised when a motor overheats and it will need time to cool before engaging. An alternative would be to incorporate the enable signal into your estop circuit so the drives are only enabled when estop is off.
Cycling the estop will clear the error.

I'm not sure if auto resetting makes sense.

I don't think this would auto reset since I would still have to power the machine on in the ui to reset the drives. Also, the CL57T only allows resetting in this way for following errors and not overheating.

Currently my external estop is wired into the contactor latch for the drives/spindle power. Should I consider changing this?

I would use a new output pin that follows the state of estop. 

Yeah, I was already doing that with the other NC contact from the estop to the Mesa input and tied into the estop-latch logic in hal.