The bright intelligent children very often are the hardest to handle,you are correct not wanting to crush his spirit and the fact you see that is good,too much control can do this,Dont get angry with him thats how power struggles begin,you dont say what he challenges you with or give infromation on the behavior that is difficult.for you. At 7 year old they are challenging their Parents and want to be independant,sometimes Parents have to let go a bit ,give him some slack whilst still having Bounderies. When he argues back, dont get into it ,let it go.less words. Make sure at this age he has plenty of Physical exercise and Games, Get Dad to be there giving him Guy time.