Why is the 737 MAX 7 selling so poorly?
There are two reasons: the market changed, and seat economics favor larger aircraft.

The NG models were designed in the early 1990s, before much of the dramatic change in the air transport market wrought by deregulation and ascendancy of LCCs. Southwest for example, was using high frequency of narrowbody aircraft to attack the network carriers and drove the extinction of widebodies in domestic US air travel. Since the early nineties, airline traffic has more than doubled depending on how you count, and there is a maximum frequency that is appealing to travelers. If you have four flights a day on a particular route and you double traffic, you might decide that six is enough and use larger aircraft. 

This is what Southwest is now doing, replacing -700 aircraft with Max8s. The Max8 acquisition and operating cost is only about 10% higher than the -700, but its passenger capacity is 25% greater. The math makes the smaller aircraft unusable, given that market demand now supports the larger aircraft. Ryanair came along later than Southwest and went straight to the lower seat cost of the larger aircraft. This is why even smaller aircraft like the Cseries are in trouble, forcing Bombardier to sell half of the program to Airbus for nothing.