Who is John contrasting in John 1:2 and John 1:7 and why is he contrasting them?

To make clear what John meant with ἦν and ἐγένετο in the prolegomenon, God and the Word in the beginning was and did not become. The same can be said for God was the Word. V14 tells us that Jesus Christ is the Word.

Ἐν ἀρχῇ ἦν ὁ λόγος, καὶ ὁ λόγος ἦν πρὸς τὸν θεόν, καὶ θεὸς ἦν ὁ λόγος. (John 1:1 NA28)

This question isn't answered with "In the beginning" (Ἐν ἀρχῇ), but with "was" (ἦν). If the Word (the Son) came into existence at the beginning, why didn't John use "became" (ἐγένετο) instead of "was" (ἦν)?

πάντα διʼ αὐτοῦ ἐγένετο,* καὶ χωρὶς αὐτοῦ ἐγένετο ⸂οὐδὲ ἕν⸃˸. ὃ γέγονεν˸ (John 1:3, NA28)

V3 is literally "All things became (ἐγένετο) through him, and without him did not one thing become (ἐγένετο) that became (γέγονεν).

Yes V4 is the following because life eternally existed as God's attribute. He is the living God.

ἐν αὐτῷ ζωὴ ⸀ἦν, καὶ ἡ ζωὴ ἦν τὸ φῶς ⸋τῶν ἀνθρώπων⸌· (John 1:4. NAS28)

καὶ ⸀λέγοντες·* ἄνδρες, τί ταῦτα ποιεῖτε; °καὶ ἡμεῖς ὁμοιοπαθεῖς ἐσμεν ὑμῖν ἄνθρωποι εὐαγγελιζόμενοι ⸁ὑμᾶς ἀπὸ τούτων τῶν ματαίων ⸀1ἐπιστρέφειν ἐπὶ θεὸν ζῶντα, ⸂ὃς ἐποίησεν⸃ τὸν οὐρανὸν καὶ τὴν γῆν καὶ τὴν θάλασσαν καὶ πάντα τὰ ἐν αὐτοῖς· (Acts 14:15, NA28)

Men, why are you doing these things? We also are men, of like nature with you, and we bring you good news, that you should turn from these vain things to a living God, who made the heaven and the earth and the sea and all that is in them. (Ac 14:15, NA28)

John could have used ἐποίησεν (made) in V3 as Luke did here, but John used ἐγένετο (became). How can we say John didn't do so to make a point?

In reference to John the Baptizer, John wrote with the awkward expression:

Ἐγένετο ἄνθρωπος, ἀπεσταλμένος παρὰ* ⸀θεοῦ, ⸆ ὄνομα αὐτῷ Ἰωάννης· (John 1:6, NA28)

V6 is literally: "There became (Ἐγένετο) a man sent from God, his name, John."

Ἦν τὸ φῶς τὸ ἀληθινόν, ὃ φωτίζει πάντα ἄνθρωπον*, ἐρχόμενον εἰς τὸν κόσμον. (John 1:9, NA28)

John the Baptizer did not eternally exist, but Jesus Christ the True Light does.

ἐν τῷ κόσμῳ ἦν, καὶ ὁ κόσμος διʼ αὐτοῦ ἐγένετο,* καὶ ὁ κόσμος αὐτὸν οὐκ ἔγνω. (John 1:10, NA28)

Jesus Christ, the True Light (not physical light) eternally existed in the World as it became through him, although it did not recognize him.

Καὶ ὁ λόγος σὰρξ ἐγένετο καὶ ἐσκήνωσεν ἐν ἡμῖν,* καὶ ἐθεασάμεθα τὴν δόξαν αὐτοῦ, δόξαν ὡς μονογενοῦς παρὰ πατρός, πλήρης χάριτος καὶ ἀληθείας. (John 1:14, NA28)

And the Word became flesh and dwelt among us, and we have seen his glory, glory as of the only Son from the Father, full of grace and truth. (John 1:14, ESV2016)

In V14 the English translations translate ἐγένετο (became) literally, and something magnificent happened. Jesus Christ physically changed (though his attributes did not), and he was born in the flesh in a particular time although his existence is eternal and unlimited by time.

Ἰωάννης μαρτυρεῖ περὶ αὐτοῦ καὶ κέκραγεν λέγων· οὗτος ἦν ⸂ὃν εἶπον·⸃ ὁ ὀπίσω μου ἐρχόμενος ⸆ ἔμπροσθέν μου γέγονεν,* ὅτι πρῶτός μου ἦν. (John 1:15, NA28)

V15 is unusual because μαρτυρεῖ (bears witness) is present tense. The translations translate it past tense. κέκραγεν (κέκραγεν) is perfect tense emphasizing the continuing result, a rather unusual expression for "crying out." It's as if John the Baptizers crying out was still ringing in John ears when he wrote this.

(John bore witness about him, and cried out, “This was (ἦν) he of whom I said, ‘He who comes (ἐρχόμενος) after me ranks (γέγονεν) before me, because he was (ἦν) before me.’ ”) (John 1:15, ESV2016)

Thus, as John words John the Baptizer's statement, while Jesus' ranking became while Jesus was on Earth, he eternally existed before John.

I am not claiming that the grammar of ἦν and γέγονεν argue for the eternally past and future existence of Jesus Christ, but that how John uses them in the contest of the prolegomena does.

Was (ἠν [ēn]). Three times in this sentence John uses this imperfect of εἰμι [eimi] to be which conveys no idea of origin for God or for the Logos, simply continuous existence. Quite a different verb (ἐγενετο [egeneto], became) appears in verse 14 for the beginning of the Incarnation of the Logos. See the distinction sharply drawn in 8:58 “before Abraham came (γενεσθαι [genesthai]) I am” (εἰμι [eimi], timeless existence). -- Robertson, A. T. (1933). Word Pictures in the New Testament (John 1:1). Broadman Press.

The opening prelude, the first 18 verses of the gospel of John 1, is simply divided as follows:

The Word (who became Jesus)

1 In the beginning was the Word, and the Word was with God, and the Word was God. 2 This one [the Word] was with God in the beginning. 3 By Him all things were made, and without Him nothing was made that has been made. 4 In Him was life, and that life was the light of men. 5 The Light shines in the darkness, and the darkness has not overcome it.

John the Baptist

6 There came a man who was sent from God. His name was John. 7 This one [John] came as a witness to testify about the Light, so that through him everyone might believe. 8 He himself was not the Light, but he came to testify about the Light.

Jesus as the True Light

9 The true Light, who gives light to everyone, was coming into the world. 10 He was in the world, and though the world was made by Him, the world did not recognize Him. 11 He came to His own, and His own did not receive Him. 12 But to all who did receive Him, to those who believed in His name, He gave the right to become children of God— 13 children born not of blood, nor of the desire or will of man, but born of God.

Jesus' Incarnation

14 The Word became flesh and made His dwelling among us. We have seen His glory, the glory of the unique [one] from [the] Father, full of grace and truth.

In both cases, the use of Οὗτος (houtos) simply emphasizes the previous noun which is in the nominative case. (the same is true of V15 which refers to the Word, again, in V14). Thus, the answer to the OP's question is:

• V2 is discussing the Word (who was incarnated as Jesus)
• V7 is discussing John the Baptist

V7 simply says that John was not the Light (ie, the Word as per V4, 9) and thus, not Jesus the Messiah.