Why were you talking to this child? Unless a kid obviously looks lost I'm not going to go up to a stranger's child and start asking them information like this. Let me toss out this scenario. If I were at WDW and saw a 7 year old get up and head to the bathroom by himself and then saw a complete stranger ask him his age, I would be keeping my eye on you, not the kid. I'm going to assume you were sitting next to them at the parade and struck up a conversation to get this information though, and that you weren't just hanging around asking kids their ages.
DD is 5 and about to turn 6 soon. She looks 4 somedays due to her size and other days she looks 7 or 8 due to what she's wearing and how well she speaks. She thinks she's 40. I think she's in her 50's and getting ready to start menopause.

I wouldn't have let her go into the bathroom alone on our recent trip last month, but that was because it was our first trip, she wasn't familiar with the park and IMO 5 is too young to walk off from the group to go potty. Now if she was 7 and had been to WDW a few times I would strongly consider letting her go by herself. Even at the age of 5 she gets to go into the stall by herself and in some bathrooms at the parks that can be quite a distance from where I am in the same bathroom.
I'm confused about the popcorn being so awful.

Was the baby being handed the entire kernel with the seed still attached? You never did state if mom was pinching off the popped part or not? I agree that's a bad idea to hand an infant an entire piece of pop corn, but I don't see anything wrong with giving them the soft part of it. When DD was 8 months or so I would pinch off the popped part for her to chew at.
DD5 has been playing outside, alone in our backyard since she turned 5. I do have her take our dogs outside with her, because I figure if someone comes up to the fence they'll bark. Also not sure who would walk into a yard after a kid playing with a german shepherd and rottweiler? I know the thought of that sometimes bothers some parents. I mean she could climb a tree, scale over to the power lines and try to tight walk across them, right? There's also the chance of alien abduction, but we take our chances with that one.
Of all of the things I've seen parents do I just don't see where letting a 7 year old go to the restroom at WDW as something to write home, or on the DIS about. When we were there just over a month ago I saw a father grab his son, maybe around the age of 6, by the head and scream into his face that he would eat before riding haunted mansion. There was so much anger and intended violence in the voice of the father I had a pit in my stomach just walking by. Now that is what NOT to do as a parent, or human.