Row of houses in sketch, engaging Queen (7)
I believe the answer is:
terrace
'row of houses' is the definition.
(I've seen this before)
'sketch engaging queen' is the wordplay.
'sketch' becomes 'trace' (both can mean to draw faintly).
'engaging' is an insertion indicator.
'queen' becomes 'ER' (abbreviation for Elizabeth Regina).
'trace' going around 'er' is 'TERRACE'.
'in' acts as a link.
(Other definitions for terrace that I've seen before include "street" , "Row of attached houses" , "Stadium's standing area" , "Stadium standing area" , "Retrace (anag.)" .)