7 days are enough for you to visit Shanghai and its neighbors. It is suggested that you book a hotel along Nanjing West Road, or around the People's Square, from where you could take a cab to the expo site easily. Of course, the hotels around the site are good choices, too.

Yes, you 4 could stay in a room if the beds are big enough. Some hotels supply two 1.5*2.0m beds in one room, which could meet your needs. Or, you may consider rent an apartment for 7 days, which including 2 rooms, kitchen and other homey facilites.