Hey Michael,
#1. OCI 7.0.1 is out - I would strongly, strongly recommend you upgrade to that instead of OCI 7.0.0.
#2. I don't think OCI 7.0.1 will be any different from OCI 7.0.0 with regard to the upgrade process. You are attempting an "in place" upgrade which should work for 6.4 to 7.0.x upgrades. The number 1 case of this process failing is due to backups failing, so it is somewhat interesting that your manual backups succeed without issue.
#3. If you are sending OCI ASUP, please Private Message me with your OCI site name , as I would like to take a look at your OCI server logs. Otherwise, if you could build a zip file of:
..\SANscreen\jboss\server\onaro\log
..\SANscreen\mysql\data\*.err
I would like to review them to see if there are any issues with your current OCI environment.
#4. Yes, the upgrade process of backing up OCI, saving the database, uninstalling OCI, installing the new OCI version, and restoring the DB is fully supported - in fact, the "in-place" OCI upgrade basically is automating all of these steps for you.
Matt