I imagine that optic board would just fine with an Opti-PAC, or probably with a mouse hack. The encoder wheel is a different design than most, but basically works the same. Like Arkanoid, it uses a gear set so the wheel turns "X" amount of times per revolution of the wheel. So if the wheel were to make one revolution, the encoder wheel may make 10, 12, 20... amount of revolutions, effectively making it much like a wheel with 60+ teeth.
The IC is likely a buffer chip, in the event the wheel is stopped with the wheel partially blocking the optics. It's not too unusual to see optic boards with more than the "typical" Atari style 4-pin connections. Midway, for example, used a 10-pin connector on the optic board for Tron.
Sorry I can't give you any specific information on that particular optic board, I haven't had the opportunity to play with one of those before. If you could locate a manual for Hot Rod, or if there is another Sega game of the same vintage that used an optical control, the manual may tell you what each pin is supposed to do. If you look at the traces on the board, you may just check to see if some of the pins go to the same point on the board. On the older games, it wasn't unusual to have more than one GND or +5V connection on a board, just in the event of a wire harness failure. Good luck!