What OS is the pinephone community edition os based on?

[Danct12]

is the pinephone similar to the Aquaris E5?

It uses Mali 400, however the SoC used in the PinePhone is fully compatible with 64-bit (Cortex A53).

That old phone ran ubuntu touch but you couldn't use it in the same way as "normal" ubuntu (you couldn't even run apt-get update was one of the comments I heard back at that time - !)

The rootfs is made read only, however you can remount it as rw and do whatever you want, but this is not how you're supposed to update Ubuntu Touch, all updates are done via OTA and not via apt.

So is the pinephone just running "ubuntu" in a chroot but quitely running android below that?

No, it does not use Halium nor Android counterparts, everything is supported by the mainline Linux kernel.