Well i don't personally know about explaining it to a 7 year old but i can tell you when i explained it to my 8 year old daughter. I basically told her the basics of how there is only 21 million coins. I proceeded to tell her how just like with gold and diamonds, bitcoins have to be mined. Lastly i told her each wallet is like a bank vault and if you loose your private key you are screwed. She understood that and how it is secret money.
Just explain it to someone in the simplest words possible in a way that they can relate so that you can have the meeting of minds. Cryptocurrencies are new that's why there's a need for a careful explanation to it since a lot of news have been circulating and they are mostly focusing on the bad side. We know that media are biased since they are paid so those banks would spend a lot in order for the people to understand only the bad side of it and not thought on investing but people are smarter nowadays compared before because of social media so they cannot easily manipulate the news. Anyway, explaining it to someone may it be a 7 year old or not should always start with the basics and let them process it and let them ask a question so that we will know their train of thought.