Can I update directly from 7.7 to 7.12?  Or do I have to do 7.7 to 7.8, 7.8 to 7.9, etc?
You should be able to go right from 7.7 to 7.12.  The messages from update.php depend on changes to the database schema from version to version made by drupal and other modules, and they are normal.

You may be interested in drush.  It allows you to run updates with the pm-update command and automatically runs update.php for you.  It also saves backups in your home directory.  There is a website, http://drushmake.me/, that allows you to build out sites with drush make if you are using drush version 5.