Have you talked to her about the rules she wants to set? She's 16. Christian family or not I think you have to trust that you have laid down a firm grounding of her own values and ability to assess other people that she wont want to jump into bed with him at the first opportunity anyway.
A chat about how she wants to handle things and that you will support her I think is the best attitude- balancing a boyfriend girlfriend relationship, whilst not neglecting your girlfriends who are your biggest support (after your family) and managing your studies is quite a balancing game. However it's one that my eldests mates seem to have worked very successfully (they are all 1st year uni now)
Why not in her bedroom with the door open? Likely they'll just hang out chat and listen to music anyway, and if your 7yr old has free access that should put everyone off anything but a bit of hand holding LOL.
I guess the important rule is maybe what if she's the only one home- will he be allowed over or not? This is hard for me and not one I've encountered really. I'd like to think maybe she wouldn't want him over when I'm not there at least for a bit- BUT they're either GCSE or AS age at 16 and study leave is looming- will you let them revise at home together? If not why not is going to be your DDs answer- if it was a girl you'd say yes....
Agree with befriending the boys parents and making him very welcome indeed in your house.
Also very glad that you are realistic that at uni you have no control and not idea what they are doing!
I think that practicing having a relationship when you are living at home is like all the other things kids do to gain independence skills. you have to help them to an extent, but also let them work things out and maybe make little mistakes and work round them... and have tissues and chocolate for breaking up too!