I think you're slightly mis-using the bread metaphor. It's usually used to bring three dimensionality into the situation. The surface of the bread takes us no further than the balloon.
Imagine galaxies as raisins in the bread - you can (just about) visualise the raisins all becoming further from each other as the bread expands - like the ink spots in the surface of the balloon but now we have 3D. I like yeast being used as the metaphor for dark energy though...
For the seven year old I'd start with the balloon metaphor, though, and sympathise with any difficulty in visualising the bread metaphor. Maybe actually bake the bread and measure distances between raisins! In "Universe in a Nutshell" Hawking admits that he can't visualise *every* situation fully in 3D - only in 2 dimensions, or, at a stretch, 21/2 dimensions... made me feel at a lot happier about my limitations in visualising things...
P.S. as space actually is "flat", according to the most accepted standard model, the bread model is a precise model of the expanding universe. A bright 7 year old might complain about using the balloon model, as the universe obviously isn't 2D! Like using a cardboard cut out instead of a 3D action man - just wrong. The bread model gets round that...