OK -he's seven -quite a silly age, a lot of seven year olds will act a bit silly especially if they are in the limelight - it's a reaction to being put in the spotlight - awkwardness, embarrassment, even immature adults do it, if they aren't used to this kind of attention etc. More often it is boys who will act out like this.
So not wildly abnormal behaviour, but sadly what happened is that no one intervened to put him back on the right track, calm him with a word or two and remind him of appropriate behaviour.
I am astonished that the teacher didn't know what to do - all she/he had to do was stop lean down to him say quietly and calmly 'remember your merit is for good behaviour, so make sure you show everyone and your mum and dad what a sensible good boy you can be, I know you can stand really nicely while I tell everyone how well you've done'
yes he was silly - children are, they make mistakes, they do daft stuff - the job of adults is to guide them. Instead he was allowed to go on showing off - of course he continued he was getting a great reaction from his peers. he was badly let down by the adults who's job it is to guide his behaviour.
Please don't let him feel he has let you down or shamed you - he made a mistake, tomorrow is a new day, and you can talk to him about why he felt silly and behaved inappropriately and maybe discuss how he'll approach similar situations. Or you can let it be over and move on. Whatever you decide, he's not a terribly badly behaved little boy - he made a mistake because he's a child. Try to focus in the next few days on the things he gets right and big them up so he feels he has pleased you and doesn't feel to rubbish about it all.
It's not about excusing bad behaviour - it's about understanding it so you can prevent it, and that will be achieved better by providing the child with strategies on dealing with unfamiliar situations.