My DD is 7 too.
She asked me about the tooth fairy, well in fact she asked me about the Easter Bunny, she didn't believe a big bunny rabbit bought your easter eggs, not surprising really.
I told her the truth, she picked her own fairtrade Easter eggs.
Then her tooth fell out. She asked me about the Tooth fairy, I told her the truth.
She put her tooth under her pillow and said she wondered if the tooth fairy would come. So I asked her what she wanted me to do. Told her she knew the truth but I was happy to go along with the story of the tooth fairy. She has lost about 5 teeth recently. Every one has gone under her pillow to be taken by the tooth fairy.
Children don't lose magic because they know something isn't real.
With Christmas, I like the pretence, I like the snowy footprints and drink/mince pie/carrot out for Santa and the reindeers. She has only questioned Santa in such a way that I don't think she really wanted the answer. So my answer has always been 'What do you think'. I only tell the truth to direct questions, and allow her to make her own mind up about the rest of it.
Watching Miracle on 34th street helps
I have told her though, that even though I don't believe the tooth fairy/easter bunny exist and that it's me that does the money under the pillow etc, I don't actually know anything for sure because you can't prove a negative, so I can't actually prove they don't exist, just that it isn't them doing the money/eggs.
She believes in God and Dragons and I've never seen those either.