They are correct: you need to get the phone running with a stock ROM before you can root, and you need to have a custom recovery installed before you can flash a ROM, which is normally installed as part of rooting. If the phone were already "S-Off" (security off) you could install the recovery now and then the ROM, but if the top of the bootloader screen says "S-On" you need to get it booting before you can do anything else.
Your best bet for rooting this device is
this guide. What this does is tells you how to use a tool called "revolutionary" to bypass the security (making the phone S-Off), which lets you install a "custom recovery". Once you have the custom recovery installed you can use it to flash unofficial software zips, such as the Mildwild ROM you have downloaded (basically put the ROM .zip on the SD card, boot the phone into hboot, select recovery, then use recovery to factory reset then install the ROM).
But this won't help with your current problem. The "7 vibrates" is happening before it's even loaded the bootloader, which happens before the Android ROM is loaded, so changing ROM will not make any difference to this. An RUU package (the one I linked or another one from that site, if there is another that will run on your phone - see below) will replace all of the software: the ROM and the lower-level firmware (bootloader, recovery, radio firmware), so if it were any sort of software problem that would fix it.
As for RUUs, these need to contain at least as new a software as the phone currently has - they won't let you downgrade - and also need to match the branding of your phone. So if it was sold through a carrier with their branding then you need an RUU for that network. The RUU will check your phone's current software and "customer id" and will not run unless they match. That is why I suggested the 2.3 RUU, since that works for many different brandings, but if you know the phone's branding, or perhaps list all of the information from the hboot screen, I can see if I can identify a different one that might work.