Yes, 7 series are cheaper than the 6 series when launched - nature of the beast thankfully.
Nothing showing on the other European sites (Belgium being the best) - so I'm guessing they figure the number of 37's sold doesn't warrant two levels of.
So, if you're buying a 37" (typically on price grounds), then there's only one version. I imagine a number are bought as a second TV rather than the primary one, so the extra features are not needed or available for the price point Panasonic are aiming it at.
I've not heard of a 700 series for the 37" either. However, at 3 metres away I would have thought that the 42" should be fine. I sit around 10 feet away from my 37" screen and definitely feel that an upgrade to a 42" screen would not be over bearing.