My grandkids (a kindergardener and a 3 year old) are fine with it. The older one gets it, the 3 year old watches and knew immediately how swiping worked to navigate and the big triangle is play.
It won't stream your Nexus 7 screen at this time.
The Nexus can present the screen, but using a different protocol and targeted at different devices.
Google may yet blend the capability for both protocols into Chromecast - or it may hold that off for the upcoming Nexus TV.
I'd be betting on the latter.
No ETA on the Nexus TV yet.