What is tty7 in the commandline?

The name of TTY actually comes from the old days of computers: then computers even had teletypewriters as terminal, so you could see the output of programs printed (tty = TeleTYpe/TeleTYpewrite).

TTY usually refers for "physical" terminals, like more attached terminals (even like a teletypewriter) to a single computer, or in our days: more separated text consoles, you can switch between them Ctrl+Alt+F1-F7 (or more, if you have configured more).

In case of Ubuntu, tty7 is usually used by Xorg, do provide your graphical environment (to be more exact, it provides a "windowing system" only, and things like the gnome - as a desktop environment solution - runs "top of it").

By contrast, "pts" is (one half of) a notion of "pseudo terminal" which implements terminal functionality without the context of a "real" physical terminal, for example if you open gnome-terminal, for the shell (which is usually the bash on ubuntu systems) to be able to run, it needs terminal capabilities.

This is also the case if you use "ssh" to log in a remote machine, so in nutshell: whenever something needs terminal/tty like functionality without having a 'real' tty.

I think usually it's the X server.

Press Ctrl+Alt+F7 and see if it takes you to your graphical login session (or keeps you there).

You can also open a shell and run tty. It will tell you the name of your current terminal.