Hcfyk

this is probably a silly question, but since words with multiple kanji are usually read with on’yomi would that effectively make most japanese vocabulary loanwords? like 森林 or 図書館？i understand differences like how 本 does not mean book in chinese but it just makes me wonder about how japanese these multi kanji words are

As far as Japanese is concerned, loanwords (外来語) usually refer to words brought into Japan from countries other than China and written in katakana. But strictly speaking, it depends on how you define loanwords. Many on-yomi Sino-Japanese words had been around even before Japanese people learned how to write their own native words, so IMHO it doesn't make much sense to call them loanwords. I suppose most English speakers do not want to call common words derived from Latin loanwords, either.

Here are some definitions of 外来語.

Wikipedia

外来語（がいらいご）とは、日本語における借用語のうち、漢語とそれ以前の借用語を除いたものである。(snip) 日本語に入った年代の古い語や日本人の生活や文化に深く浸透したものを指す語の一部（「タバコ」「イクラ」など）も外来語と認識されないことが多い。

デジタル大辞泉

日本語では、広義には漢語も含まれるが、狭義には、主として欧米諸国から入ってきた語をいう。

名鏡国語辞典

中国から入ってきた漢語も広義では外来語だが、ふつう外来語とはしない。

大辞林 第三版

広くは漢語も外来語であるが、普通は漢語以外の主として西欧語からはいってきた語をいう。

loanwords tag

外来語. Words brought into Japanese from languages other than Chinese.

I think you are answering your own question in part. Most compound words use a reading that derives from Chinese but remember that Japanese was its own language already before it drew from the Chinese writing system, as far as I know. It might have adopted many loanwords but it also used onyomi reading for many existing Japanese words. That is, in part, why I would say that it might be too much of a stretch to call all these native Japanese terms loanwords on that basis alone.

You call your question silly because you recognize that you would probably be stretching the interpretation of what constitutes a loanword a little, but on the other hand I have had similar musings about the onyomi readings and the origin of the Japanese writing system. It probably does make Japanese a very unique language that way, but I think it would be similar to calling a large portion of English words "loanwords" from Latin or Greek because one can trace their etymology to either.

Going by the narrower definition of a loanword, we usually mean terms that are adopted without or with little translation. There certainly are many such loanwords in Japanese but since most of these terms you would be including with your definition had words in Japanese that were distinct from Chinese before characters were adopted for them I would say that it is simply too much of a stretch to call such a substantial portion of the Japanese vocabulary loanwords.