True that it may not solve the OP's problem and may present new ones if some possible underlying current problems don't get solved.
BUT, it is a simple answer to this question in the OP:
Or, can anyone recommend a decent but not too expensive shift lever that allows continuous adjustment rather than fixed positions that would work with a 7 speed rear dérailleur ?
Depending on what "not too expensive" means, another option I like is a DX thumbshifter in nice shape. I think they still go for $30 or so on eBay. 7-sp index/friction option.
XC-Pro or XT for a little more dough.