It is totally normal and natural for her to explore her body. Unless she has watched some after hours movie, or someone told her, she doesn't know what that area is for except for going to the bathroom. But don't think that just because she is 7yrs old, she doesn't have feelings in that area either. And yes, even to her at a young age, it probably feels good when she does it, she doesn't know why but hey, it feels good so keep doing it. You can't get mad at her for it. You need to sit her down and get her to open up to you about it. Ask her why she thinks she does it, etc. But if you are the slighest bit angry, mad, upset, etc, she isn't going to tell you much because she is going to be afraid of getting in trouble. And if she gets in trouble for it, the more she is likly to go hide some place and do it and not just let it be a phase.
Just explain to her that it is ok to explore, in her room, in private and that if she ever has any questions that she can come to you. This is your chance mom to open that door for when she goes into the tween stage and the teen stage to keep that open mom/daughter relationship so she can come to you 6yrs from now and tell you about the boy that makes her heart and feet feel like they are floating away!! Don't shut that door before you even have a chance to open it to her.
As far as your daughter being perfect. She still is. I don't know what you mean by what you said, but all children are perfect, they just need proper guideance to grow up in this ever changing world we live in.