I agree with the guy who told you to spend at least $400. For one thing that Trek 7000 has a high tensile steel frame which is basically the same frame you will find in walmart on a lot of bikes they sell. Spending an extra $150 to $200 will take you into a MUCH better frame and also better components. There is a world of differnce in my opinion, certainly worth the extra money.
Trust the LBS guy, he knows what he is saying in this case. Also, whether or not a hybrid is right, you will have to learn. I try and steer people to mountain bikes as their first bikes as I feel they are more versatile than hybrids. But the hybrid marketing concept (a bike that is a cross between road and mountain) appeals to so many people because it seems to make sense.
It is only after you own the hybrid that you realize it isn't a hybrid between a road bike and a mountain bike. In fact it is a poor excuse for either.