I don’t think you need the entire JR West 7 day pass with that itinerary, you can do a smaller area 7 day pass which will save a bit of money.

If biking isn’t doable and you don’t want to deal with steps I’d maybe suggest skipping Onomichi. It’s still got a lot but it is a lot of climbing, though the main shopping streets along the water are also very nice. Another commenter mentioned Iwakuni but I don’t really get the appeal, the bridge is decent enough but not anything worth going out of your way for imo. Options I’d recommend over Iwakuni if Onomichi isn’t an option:
- Kurashiki- easily doable with the pass. Cool old town area with canals. More of a half day than a full day. Could be paired with Okayama Castle and gardens if you want to make it a full day
- Tsuwano- a bit trickier to get to but very pretty, this is what I think people should be talking about when they say Little Kyoto, not Kanazawa. Probably would be a full day when including travel time
- Matsuyama- a bit of an oddball recommendation but very doable as a day trip via ferry, just a little expensive. The ferry ride is fun and very scenic, Matsuyama castle is quite impressive (you can take the chairlift up, so no need to hike), and Dogo Onsen is one of Japan’s most famous.
- Fukuoka- Fukuoka is one of my favorite cities in Japan, if you have the all JR West pass or a few of the other ones the Shinkansen here is included. The best food in Japan (better than Osaka outside of western food imo), good shopping, nice parks. It’s a bit better as a city to use as a base rather than visit on a day trip, but could still be worthwhile.

Regarding your booking question, it means you can only use the machines for the first 6 reservations, after that you need to go to the ticket office at the station (all major stations have one) to make a seat reservation. i don’t bother with seat reservations on most shinkansen trains anyway, if traveling outside of peak times you’ll usually be fine without, the only risk is not getting to sit next to travel partners.