7mm is fine.. we don't run anything smaller because otherwise Cody is too deep in the trigger all the time. It might not be a bad idea to run 6.5 if you feel you have enough power.
Re:.. the plug issue.. think of a hotter plug as advancing your timing. If it's not detonating, the hotter plug should be better. If it's super hot outside or it's detonating, you might need a colder plug. Mileage might be a tad better with colder plug but less power as well. Hotter plug will clean out better on the mid range. For our engines I definitely recommend the hotter plug because there is a gulp of fuel in the middle...