So this means I should change it from cut in to cut out? What is it doing when it's in cut in?
You don't have to. All the modes work. Cut in and cut out refer to when the thermostat turns the circuit (and hence your fermwrap) on or off, and the combination of that and heating or cooling mode, the differential, and the temperature you set, define what happens.
Let's make it simple by focusing on your situation.
You're using a FermWrap, which is a heater, so I assume your environment is cold — either a basement or a fridge — and you want to heat your beer to be close to the desired temperature, so you want to use the controller in heating mode as you've said you have it.
You also said you've got yours set to "cut in."
What that means is that the thermostat will cut in — turn on the heater in this case — when it reaches the temperature you've set. When it cuts in, it is going to start heating and then the controller will cut out at the set temperature plus the differential. So in your example of wanting to get 74-76 degrees, and your controller in cut in mode and heating mode, you would set the thermostat for 74 degrees and the differential for 2 degrees. That way, if the temperature fell below 74 degrees (the set temperature), the heater would "cut in" and heat the wort until it rose 2 degrees (the differential) and would cut back out at 76 degrees.
I guess what I'm saying is you're fine how you are. If you're in heating mode and cut in mode, set the temperature to the lowest acceptable temperature and set the differential so that the set temperature plus the differential is your highest acceptable temperature.
I hope this helps.