Your Trek is probably spaced 126 mm OLD for a 7-speed freewheel/cassette hub. You can install an 8/9/10-speed hub (130 mm OLD) with a small struggle as it will be a snug fit. It won't do any harm but will be a bit of a nuisance every time you change the wheel.

I had a 1983 6/7-speed Trek 400 spaced 126 mm that I upgraded to a 130 mm 8-speed rear wheel and used it in unaltered form for a while and then "cold set" it to 130 mm just for the conveneince.