What wonderful memories you two will make! I love dreaming about days of sewing with my grandkids when they're old enough.
I remember learning to sew.All I wanted to do was sew. Push the pedal and watch that machine stitch. I wasn't into cutting. I would say get her good scissors her size, not a rotary cutter. I would go shopping with her and let her pick out some precuts, unless you can do the cutting for her. I recommend a simple quilt of a huge 9 patch, like a baby quilt that's got only 9 pieces. Most 7 year olds want a project they can "make and take" in a day. They don't generally have the attention span to stretch out a project over several sessions. Maybe you should cut the binding and help her attach it.