Yes you can definitly make your own applications and games if you know how to write program in java.. Read this for more info
Handy Informations: How to Develop Your Own Applications and Games for Android Devices?
Pre-root means it comes rooted. i.e if you flash cm7 it will come rooted/have superuser.apk so you don't need to root cm7 ....
CM7 and andro-id are both custom rom.. CM7 is more better than andro-id and is based on gb 2.3.5 while andro-id is based on gb 2.3.4.. Also cm7 gives you more options to customize your phone ..
cm7 is better go for it ...