I'm not even sure that 7.0 will work on a Colour Classic. But as a general rule of thumb, the way to make a system specific disk if you are using a generic boot disk (or a boot disk for another system) is to add a system enabler to the system folder of the boot disk. Of course you may have to remove some other files first just to squeeze it on.

Yes, you can add the stuff that you want from later versions of the system software. I typically went the route that you suggested in order to create a lean 7.1 system with just the upgrades for it to run the software I wanted to run.