Yes, the decision of whether to go 7 speakers or 5 speakers is determined by the room and your seating position within it.
You need an absolute bare minimum of 4 feet from the back of your seat to the wall behind you before you should ever consider adding 6th and 7th surround back speakers. And you're not gaining anything from those additional speakers at that distance. It's merely the minimum so that the 6th and 7th speakers do not make things sound WORSE.
You honestly need a good 8 feet from the back of your seat to the wall behind you before surround back speakers start to provide any sort of audible benefit. At that distance, you can start to hear a bit of a "hole" in the surround field behind you. Although that is still assuming you have your regular surround speakers positioned directly to either side of your seat. If you have your surround speakers positioned slightly behind the seat, you'll need 10 feet or more from the back of your seat to the wall behind you before 6th and 7th surround back speakers begin to produce any audible benefit.
When you play back a 7.1 channel recording on a 5.1 system, you do not "lose" anything. The 6th and 7th channels are automatically down-mixed into the regular surround channels. So none of the sound "disappears", it just gets redirected into your existing surround speakers. Even if you play it back in 3.1 or 2.1 or 2.0, nothing gets "lost". However many speakers you have, the sound gets down-mixed into them and you still hear all the sound
The purpose of the 6th and 7th surround back speakers is to "fill in" the enveloping surround field when you have a lot of space between the back of your seat and the wall behind you. If you have a large gap behind you, the regular surround speakers might not be able to make it seem as though sound is coming from behind you. So only consider adding 6th and 7th surround back speakers if you have a lot of room back there. They will make things sound WORSE if you have only a 4 foot or less gap. They don't really add anything useful if the gap is 4-8 feet. Only at 8 feet or more would I recommend adding the 6th and 7th surround back speakers.