By all means take the 7 year old to the party. Don't worry about the younger sibling. There will most likely be other younger (and older) siblings there as well. I know the parties my son has attended and hosted we always have younger and older siblings attend too. Sometimes the parents call and ask if it is ok, sometimes not.
I am very much a wall flower and not very talkative around people I don't know. But, you already have one thing in common to talk about, children. People always have stories.
My favorite reason to attend parties for my son's friends or host them for his b-day is because it gives me a chance to see how he relates and plays with other children. I had to go back to work shortly after he was born. Though putting him in day care was the hardest thing I ever did in my life, it was the best for him. He is very social (like his dad). He loves friends, he always finds someone to play with when we go places. Before he could talk you could tell by Sunday he would be looking around the house for other people his size/age.
Kids at his day care started having parties and inviting his class at about 3 years old. It was funny to see them come face to face the first time outside of school. They knew they recognized the person, but it wasn't in the same setting as it normally was.
His 6th b-day is this Saturday and we are having our usual swimming party at the Elks Lodge here. He's invited his class, his friends that are family friends, and also his t-ball teammates. The teammates are all very excited. They have gradually become buddies and this will be the first time they have had the opportunity to "socialize" because they only really see each other at practice or a game. A few go to school together, but that's it.
By all means, take him to the party. He'll love it and you'll get used to it. Take your camera, it's a great place to get shots of the kids together because you are not having to attend to hosting duties. Besides, when his birthday rolls around and he wants to have a party, what are you going to do? If you have declined others invitations they may be hesitant to attend his.
One other thing... At day care, the year all the kids were turning 5, he was invited to his classmates party. I knew the whole class had been invited. We had had another party earlier that day, I was tired, and didn't really want to go. But, I had RSVP'd and he was looking forward to it. Well, my son ended up being the ONLY child who came. You could tell the b-day boy was disappointed at the turn out in addition to the parents who had gone to all the trouble. I was sad for him and them. But, I was so glad I had bit the bullet and gone. Imagine if we had not gone!