When you get the indications you show, there system is not being directed toward a bootable install.
Since the system was factory Windows 8 and probably UEFI, are you going back to Legacy on purpose?
It was also probably set up as a Windows 8 Secure Boot system, so for Windows 7 you need to look for a bios entry relating to the CSM (Compatibility Support Module) and enable that. The Secure Boot option may or may not need to be changed for Windows 7.
To boot to the Windows 7 DVD, you should have the option to enter a Boot Device Menu, either through the bios or with a key combination. Use that to select the Windows 7 DVD and you may see two entries for the DVD drive. One with a UEFI indication and the other for legacy.
If the...