Although you still may have to (ad)venture outside the town to get to the superior facilities.
"Everyone's got one. Better to be a smart one than a dumb one." - me
"It's people like you that think you know everything that give those of us that do a bad name." - me
Boardgame Super Minion - Gen Con 07
Player made crafting tools (iron, steel, dwarf steel, etc) are still linked to character level, not crafting skill. So, as a level 7 character, you would be restricted to bronze tools at best. As for being able to advance craft tiers, this is possible with a couple of points of note. First off, you would still need another character to get supplies for you, if they are gathered supplies you need (wood, ore, gems, etc). Obviously your level 7 is not going to be gathering any ancient iron, especially not while in town. The second main thing to remember is going to be getting access to the Artisan tier and the superior facilities. At this point, there will be some quest you'll need to do, whether journeying to Esteldin for the superior workbench, Rivendell for the superior scholar's study, or whatever. And even if you already have somewhere else you can go for those (Thorin's Hall for the workbench, the Mathom Society for the study, etc) you will still need to complete the quest to gain access to the Artisan tier. In short, it is doable, but you will run into a few glitches along the way. They can be overcome, but you will want to plan for those.