I have this game and I love it. Up to four people can play together, and unlike most games it's a coop game rather than a competition.
It does require some thinking, but not all that much. It's really more problem solving than fact-based thinking - at a few points you have to figure out that you need to drag a block somewhere to stand on it or stick a particular sticker on something.
Some parts are really difficult at first but once you get used to it it does get easier. One really good thing about the game is that it doesn't use the same life system that most games use. In LBP, there are respawn points throughout each level. If one player can't make it through a particularly difficult part of the level, they can just respawn when another player gets to the next respawn point.
I think that a 7 year old would enjoy the game, though I think that there are a couple of points that they might need a little bit of help with, if they are trying to unluck 100% of the game. Actually there are a few parts that require 2 or 4 players to unlock some things, but one player can finish all of story mode by themselves.
