Airport Express with New Firmware 7.8 - Problems with connectivity and Airport Utility
Apparently there are connectivity issues with this new firmware, in particular when extending networks. Here are other people describing the same: 
https://discussions.apple.com/message/34061766

Right now, the solution seems to be to downgrade to the previous firmware, in case you don't want to use AirPlay 2.

I don't have any major issues when using the Airport Express just as an AirPlay 2 client, but of course this leads to loss of the extender function.