Hi kimono,
Haha, to be honest, I've only been to Tokyo and that was only for a day. I've not stayed at any of the hotels before, but recommended Kadoya to friends and the feedback was it's a small but clean and decent hotel. Moreover it's right outside Shinjuku station.
Well, I feel that 7 days might be a bit rush, and end up with 2 days at each place. My friends spent a week just in and around Tokyo, covering places like Hakone, Yokohama and Disney Sea as well. In Tokyo, you already have Ueno, Asakusa, Shinjuku/Harajuku/Shibuya, Odaiba...
If you're going to Kyoto in autumn, the shrines and temples will look even more captivating in the blazing autumn leaves.
It really depends on what kind of tour you want. Just visit the main attractions? Or to walk around more, experience Japanese life on the street, eat ramen at the roadside stalls, etc etc...
Personally, I feel that if you think that this will not be the only time you'll be visiting Japan, I'd encourage you to split up Tokyo and Kyoto-Osaka. Otherwise, if you don't mind a packed itinerary, you may just want to pick out a few attractions you'd like to visit at each place, which will be workable too I think, since many packaged tours have 7-day tours covering all these places as well.