Yup, tons of affordable bikes being sold by major and minor brand names using 7-speed freewheels. An early 2000s model Globe Carmel comfort hybrid that I use as an errand bike came with a 7-speed freewheel. My early 1990s Univega came with 7-speed cassette. I've swapped wheels between the two, no problems. 7-speed freewheel wheels are usually interchangeable with 7-speed cassette wheels, maybe needing a couple of minor tweaks depending on indexed shifter.
I've squeezed 130 rear hubs into my steel frame bikes original intended for 126, no problem. I didn't cold set them or do anything special, just gentle pulled open the frame to insert or drop out the slightly wider hub.
With SunRace chromed 7-speed freewheels and cassettes I don't need to swap rear derailleurs/shifters. The SunRace teeth are cleverly shaped to work fine with both my Suntour Accushift and Shimano STI setups. I've swapped wheels between bikes with Suntour and Shimano groups, no problems.
And folks who know a thing or three about engineering say 7-speed is the maximum a freewheel hub can handle without straining the axle. Dunno, I weigh 150, so the only strain I've ever put on a bike was bending the shaft on a low quality QR for my Cycleops trainer, mostly because the threaded end cap wasn't adequately supported by the cup in the wheel bracket of the trainer.
When I was younger and stronger I couldn't imagine ever needing more than 7 speeds. The main problem with my old 5 speed freewheel was deciding on gear steps for smooth shifting between climbs, flat terrain and downhills. So a 13-24 or tighter 7-speed freewheel seemed perfect.
But now I lean toward 13-28 and sometimes up to 32 or 34T big cogs for my heavier bike. And that can make for some awkward jumps between some cogs. The 7-speed Shimano MegaRange is the worst, with a normally spaced 13-24 for the first six cogs, then a huge jump to the granny gear. I switched that wheel to a SunRace 14-28, with much better spacing.
I have 10-speed drivetrain components in a box but have never used 'em. But I can see the advantage to a closely spaced 10-speed 11-25 cassette. Although when I do use these components I'll probably get a 12-32 cassette.