Unfortunately, 8.5 is as low as you can go if you want USB support. Given that no Macs used USB until 1998, Apple never introduced USB drivers for any version of System 7, and nor did any third parties.

If you really want to stick with System 7 as your main OS, what you probably could do is do a very basic install of 8.5 with the USB drivers on your drive and just use System Picker to switch between the two, only using 8.5 for USB access. Or better yet, repartition your drive and create a small partition for OS 8.5, and do the same thing.