Okay....for me this rings alarm bells. I dont think a 7 year old child should be sucking on another childs nipple. I just think its too young to know that sort of behaviour.
The reason why it alarms me is this:
My nephew is 7.5 and DS is 6.5. From about the age of 4.5 the nephew was engaging in behaviour that I thought was inappropriate with my son and on his own. He would wash my sons bottom if they had a bath together (he would have an erection doing this), my sis would tell me that he would put things up his own bottom as he said that he liked it. Over the years he would take my son somewhere private and take his pants down and then would touch my son. DS would come to me and tell me saying he didnt like it and didnt want to do it but nephew made him.
I spoke with my sis about this be she brushed it off saying it was 'normal' behaviour. I spoke with my Health Nurse and she was incredibly alarmed at what was happening and gave me recommendations as what to do. I spoke again with my sis but she again brushed it off.
Because she was so nonchalant about it I made sure that whenever DS and nephew were together that they were never alone and I could of times I did catch him doing this and spoke with him about it.
Now it has come to light that a 15yo boy in the neighborhood has been molesting nephews friend for over 4 years - at school and at home. I wont go into the specifics but its awful. And the friend has been doing the some of the same things to the nephew….and the nephew in turn was doing it to my son.
My son has expressed that he doesn’t like it and doesn’t want to do it and in my eyes he is being abused….its a terrible situation especially as the children involved are doing things that they don’t necessarily know is wrong.
I have taught my kids that nooone should touch their p3nies, etc but my sister never did that with nephew as she thought nothing like that would happen. Now she wishes she did as maybe all this wouldn’t have happened.
Now I am not saying that this girl is being abused and she may be exposed to some things that she shouldn’t be exposed to at such a young age BUT if you think its wrong and inappropriate then it is. If your son is saying he doesn’t like it then that is when you need to step in and ensure it doesn’t happen again.
This document has a great table in it (on page 12) that describes what is normal and what behaviour is of concern. It may help address some of what you are asking - http://www.ais.sa.edu.au/__files/f/78337/RespondingtoProblemSexual.pdf
I wish you all the best.