Dissecting the regulatory principles underlying function and activity of the SARS-CoV-2 spike protein at the atomic level is of paramount importance for understanding the mechanisms of virus transmissibility and immune escape. In this work, we introduce a hierarchical computational approach for atomistic modeling of allosteric mechanisms in the SARS-CoV-2 Omicron spike proteins and present evidence of a frustration-based allostery as an important energetic driver of the conformational changes and spike activation. By examining conformational landscapes and the residue interaction networks in the SARS-CoV-2 Omicron spike protein structures, we have shown that the Omicron mutational sites are dynamically coupled and form a central engine of the allosterically regulated spike machinery that regulates the balance and tradeoffs between conformational plasticity, protein stability, and functional adaptability. We have found that the Omicron mutational sites at the inter-protomer regions form regulatory hotspot clusters that control functional transitions between the closed and open states. Through perturbation-based modeling of allosteric interaction networks and diffusion analysis of communications in the closed and open spike states, we have quantified the allosterically regulated activation mechanism and uncover specific regulatory roles of the Omicron mutations. Atomistic reconstruction of allosteric communication pathways and kinetic modeling using Markov transient analysis reveal that the Omicron mutations form the inter-protomer electrostatic bridges that operate as a network of coupled regulatory switches that could control global conformational changes and signal transmission in the spike protein. The results of this study have revealed distinct and yet complementary roles of the Omicron mutation sites as a network of hotspots that enable allosteric modulation of structural stability and conformational changes which are central for spike activation and virus transmissibility.