It is completely normal and is only a problem to the extent you think a seven year old can get 'caught' doing something quite natural. Well done for raising this question.

Obviously sex and sexuality is one of the most wounded parts of the human being in our society. We are very damaged around it. Sexual guilt, shame, self-attack, repression of natural feelings are all major health risks. They are so common we think it is normal to be so hurt in these areas. So, as best you can, instead of passing on the problem, I would take as light-hearted a view as possible of this. I appreciate it may be a stretch for you not to worry about it- I can tell it is stretching your value system and beliefs about what is and is not appropriate. But sometimes these problems are gifts in disguise. Maybe you might think about relaxing a little, in case you are making it worse by reacting so strongly. Look at your own fears. What is it you are accusing your child of? We all have shed loads of sexual energy - its great stuff. Vitality, charisma, excitement, gateway to creativity....are you living a life of roles rules and duties or have you really expressed yourself? These are valuable questions I think.
As society asks us to feel funny about our unfolding awareness of sex as we develop, to judge it as bad or dangerous, we push all that energy down. Guess what? It gets acted out all over the place in a quadrillion dollar porn industry. This is the price we pay. So, as best you can explore your own sexual history, your own hang ups and places of pain, have compassion for yourself, for your needs and feelings. Be gentle about it. For your children it is important for you to know that sexual energy becomes completely safe to the extent that the bonding between the mum and dad, partners, parents, carers or guardians, is good. This is quite a big subject so if anyone wants to know more do email me about it. We will only not trust our children where we do not trust ourselves. Your son is normal…..what does that say about us?