Does SQL 7.0 allow you to restore a table from a database dump much the way SQL 6.5 did?
No, not exactly.
The only way you can restore an individual table in SQL 7 is to have the table created in its own file group. Then you can restore the individual table.
Before you go out and do this, though, be aware that if the table to be restored is referenced in a declarative referential integrity constraint (that is, if its primary key is used as a foreign key somewhere else) then you bear the weight of fixing the integrity after the restore, because the foreign key relationships are sure to be out of whack after the restore.
The answer is don’t do this; I think it’s a bad practice. You’d be better off working out the timing and size requirements for complete database backups and differential logs.