Disc rot happens (see
http://en.wikipedia.org/wiki/Disc_rot ) but I suspect the seven year CD-R quote is a generally accepted life guarantee, not the guarantee that the disc is then bad. By the way, the most common estimate is 10 years (see
http://en.wikipedia.org/wiki/CD-R ).
On pressed CD's, the aluminum layer covering the "pits" is tough but if the disc seal fails typical human environments will eat it away. Gold is supposed to be more archival. Not sure what the best media is right now. I've read good things about DVD data discs.