Sure, early reading TO your child is lovely and certainly a nice way to phase into the proper reading of later on. But there are many reasons for this, APART from the "storeis come from books; these are words; you will learn to understand how to decipher the letters" thing. Positive attention from you = very important to your child's development. Being able to experience an abject (be it an apple, a book or a toy) from start to finish (i.e. looking, touching, holding, eating, then casting away - a complete experience) is very important as well.
Being able to figure out that stories come out of books and that he or she is learning to read before age 1? Well I like the circus-trick "Your Baby can Read" thing as much as anyone else, but it's not necessary and has been proven not to particularly help your child get much further at all, come grade school level...
Let's look at this from a child's point of view. He or she sees a toy. They pick the toy up and give it a good look-over, noting the colors and the contrast between them; the weight; if the toy makes a squeak or some other kind of noise; if it is hard or soft; warm or cold - all of these tactile things. Then he or she wants to taste the book, to see what it tastes like, since the child has now learned that they have the wonderful ability to taste and that one thing tastes different from another - and that some things taste good, and bring pleasure! What does the toy feel like in his or her mouth? Is it squishy? Can he or she make it softer by chewing on it?
Since toys are just "things," there are a lot of other objects that qualify for this treatment as well. Everything, in fact! From your cellphone, to a piece of carpet fluff, to, well, a book! The fact that you are reading words that come FROM the book might be a connection that is made a heck of a lot later than 7 months! If your 7 month old can sit through a book, it may be that your child is simply liking the fact that when this particular object is around, mommy or daddy seem very interested in it, and interested in them
at the same time, for a while. That if the child tries to eat the book, the situation changes and they don't get that same atmospheric feeling any more.
So every child is different. Your little human might not think that what YOU think is important really is
important at the moment - he or she might be more interested in the taste. Heck, maybe they'll grow up to be fabulous chefs!
All in all, understanding that the shapes on the pages are letters; they make words; mommy reads the words and talks to make a story will come when it is ready to come. Don't worry about a thing, mama!