Sure, Hythloday spends a lot of time discussing religion, but it's also one of the subjects that keeps his readers guessing. Why? Well, it's a pretty hot topic, and since More was writing Utopia at a time of major religious upheaval (think Reformation, burning at the stake, heretics, all that scary stuff), you didn't want to be caught saying something too controversial on the subject. What we do know about religion in Utopia is that most people believe in a single, God-like, all-powerful being who instills in us a moral code. But (and this is a big but) there's religious freedom to believe what you want. What do you make of that?
The Utopians don't actually have a religion; they just follow a collection of philosophical observations.
The fact that Utopians aren't Christian (the only acceptable religion in More's world) is proof that he didn't actually intend Utopia to be a model society.