For example, let's say the word is "wrapper". Are the contestants allowed to list a bunch of rappers (Eminem, LL Cool J, etc) which might lead the contestant to say (and mean) "rapper"? Since it is spoken only, spelling is irrelevant. Do the rules allow for this?
While not directly about the TV show, the rules for the 2008 board game version, published Endless Games, does explicitly say that homonyms are allowed:
NOTE: As the Pyramid is a verbal game, words that sound alike are equal to the correct answer.
Example: If the clue-word is “waste”, the giver might say “This is the part of your body above your hips.”
Receiver - “Waist” is a correct answer.
Unfortunately, I can't find a similar set of rules for the game show, nor could I find any video clips of someone using a homonym for their answer.
In the front game, the judges accepted homophones as correct answers (in other words, if the word was "flour", you could legally give clues for "flower"). In addition, it was legal to give a clue for a word that was part of the answer and then see if the full answer would click from there. Many teams exploited both of these rules.
According to this page with tips on how to win:
The rules are quite liberal, in fact: if you get the prompt [window] “PANE”, you could go for the homophone aches and…. And you should be able to clue for just the last name: e.g., with “STEPHEN KING” as your prompt, queen and… should work fine.