Yes PSUs do get very hot.
The amount of heat that a PSU creates is the difference between the total power demanded by the components in your PC and the total power drawn from the power grid. In a perfect world with 100% efficient PSUs this would be zero, but some PSUs can have remarkably low efficiency. If you want a PSU that runs cooler and provides more stable power to your components then you need to get a PSU with an 80 PLUS certification.
Your PSU is 80 PLUS Bronze certified which means that it has an efficiency of at least 82% at 20% load, 85% at 50% load, and 82% at 100% load. If your components are drawing all 700 watts of rated output power (or more) then your PSU will be generating a little over 150 watts of heat, about as much as a high end graphics card. So yes, they do get quite hot at times.
exactly the reply i was looking for! informative and to the point! good to know it's nothing unusual.