A moralist to contact in Paraguay (7)

I believe the answer is:

preachy

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'a moralist to' is the definition.
I can't judge whether this defines the answer.

'contact in paraguay' is the wordplay.
'contact' becomes 'reach' (synonyms).
'in' indicates putting letters inside.
'paraguay' becomes 'py' (I can't explain this - if you can you should give a lot more credence to this answer).
'reach' placed within 'py' is 'PREACHY'.

Can you help me to learn more?

(Other definitions for preachy that I've seen before include "Sanctimonious" , "Tediously moralistic" , "Given to tedious moralising" .)

I've seen this clue in The Daily Express.

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