Hard temperatures rises for a MOSFET
According to datasheet:

But you're not driving the gate with 10V, rather it's close to 6-7V so RdsON will be higher.
Note this is a guaranteed maximum value. Actual value may be lower. As Andy says in his answer, if the FET follows the &quot;typical&quot; characteristics graph, its RdsON will probably be around 0.7 ohms, but notice the text in the corner of the &quot;typical&quot; characteristics graph that says &quot;20µs pulse, Tc=25°C&quot;. And according to fig.4, RdsON increases with temperature, but according to fig.3, threshold voltage decreases with increasing temperature. There is a lot of dispersion in the threshold voltage value, so it's impossible to tell exactly how much except by measuring the FET, which isn't that interesting. And you might get that special snowflake, stubborn FET with a threshold voltage at the upper end of the guaranteed range, that really needs the extra volts on the gate.
It's a lot less headache to use the guaranteed RdsON spec.
The simulator screenshot you show says the FET will dissipate 3W, that could be pretty realistic. In any case, without a heat sink, it will fry.
Solution:

Get a FET with lower RdsON, if you just want to switch a lamp you don't need a fast FET, so basically anything with RdsON lower than say 50 mOhms. No need for a 400V like IRF730 to switch 12V, you can use a 30V or 40V FET.

Drive the gate with the full 12V by removing R2 and D4, also you could set R5 to a higher value to make sure the LED doesn't use most of the available optocoupler output current.


Note the opto isn't really necessary, unless you need the isolation.
Extra info:
RdsON is a compromise with speed and rated voltage. Higher rated voltage FETs will usually have higher RdsON. If you need the voltage rating, then there's no choice, but if you're not using the actual voltage the part is capable of, you still get the high RdsON.
Lower RdsON means a bigger FET which will be slower. So if you care about speed (say, in a switching converter) then it's worth it to spend time to find the right compromise. But to switch a lamp, you don't care about speed...
This FET is meant for fast high voltage switching, at the cost of higher RdsON.
So, set search criteria to RdsON &lt; some value that means it will stay cool without heat sink, and hit &quot;sort by price&quot; button. Since you have 12V to drive the gate, no need to spend time looking for FETs that work with lower voltage gate drive too.