I've had a 7 gallon bow setup for a year. To first answer your lighting question, Get a smart lamp retro kit 32 watts. This will give you plenty of light and it is designed specifically for this tank.
A couple of things that have worked for me. I put some calupera directly in the tank, I have about 15lbs of live rock in the tank. My nitrates stay about 20, but my rock is covered in coralline algea. I have some pulsating xenia that started at 2 branches that is now about 10.
I have had little to no success keeping fish in that tank. The longest I kept a fish was a catalina goby, but the wife turned off the AC before we left for the weekend once last year, that was the end of the goby.
I can't seem to keep a fish for much more than 3 months, but I have some amazing inverts. The rock is just crawling with pods, worms, and mullosks.
For those out there that say you can't do a Nano I invite you to come to my house. Good luck