I'm not too sure about reading ages, but I loved A Neckalace of Raindrops by Joan Aitken. How about Noel Stretfield, probably very old fashioned but lots of girly stuff like Balet Shoes and White boots. I remember loving a collection called A book of Princesses. They collected all the fairy tales about them
My dd and I have just been reading books by Gwyneth Rees that would be about the right reading age. Mermaid Magic is very absorbing (even I wanted to know what happened!) and it's nowhere near as trashy as it looks. It deals with issues like ethnic differences and adoption without being obvious, and it's written by a child psychiatrist.
I loved the Little House on the Prairie books from about that age...and the fact that they are based on the author's life made them even better. I enjoyed the Heidi books as well, and Mallory Towers (about the boarding school), and I would echo the Secret Seven and Ballet Shoes. Pure escapism, and why not - she's only 7!
definitely try the rest of the Jacqueline Wilson's - they're all brilliant!! Others to try her with are The Enchanted Horse by Madeline Nabb, The Worst Witch by Jill Murphy, My Majeika by Humphfrey Carpenter and Bill's New Frock by Anne Fine. Also ask the librarian at the library - they will direct you to the right place.
Also got her Milly-Molly-Mandy from Waterstone's as it brought back fond memories from my childhood!! Although a lot of the stories and what happens in them wouldn't be considered quite "pc" these days!!
Have a look at "The Ultimate Book Guide".
It lists books suitable for 8-12 year olds, cross-referencing them and giving outline of book and author.
A really good feature is the bit that says "if you liked this book, then try..." and "if you need something similar but a bit more challenging, try..."