First of all, 7 weeks is a little young to bring a new puppy home. Usually, with the smaller breeds especially, a puppy shouldn't be weaned from it's mommy until 10 -12 weeks old (larger puppies, 8-9 weeks). At 7 weeks old, they are going through a fear stage and they still need their mommy's antibodies from her milk.

However, now that you have your little baby, I would get him to a vet quick!!! If there's blood in the stool and he's not eating, it could be parvo - he will get dehydrated quickly - I hope it isn't and I hope I don't scare you. It could have been the milk because milk is known to cause diarrhea in dogs but the blood is what concerns me. Plus if he's gagging, he may be trying to vomit which is another indication of parvo. Get to the vet NOW! Even if it isn't, you want to be safe!