I've always broken down buying a car into three areas.......
#1 would be a car that needed no body work but needed mechanical work. This category would be a good 5 footer (being at 5' distance the car still looks good) This is personally the most comfortable to me as fixing an engine, transmission, rear end or suspension is ok.
#2 would be buying a car that was sound and all one color with minimal rust and fair mechanicals along with needed TLC on the interior.
#3 would be a partial restoration, paint and or replacement panels.
#4 would be a total restoration.
I live on the West Coast so it may be different on the other side of Rockies and prices of these Mustangs is all over the map. People are asking outrageous prices for what I consider a total restoration. This car is a #3 in my book and if I were looking at buying it I wouldn't pay any more than $2500 because you would probably spend more than $4500 fixing it up if $7k is your budget.
Having $7000 to spend and looking for a decent car is going to take some time and although I'm sure you want to find something sooner rather than later I'd keep looking.............even if it meant outside of your area. There are a lot of very knowledgeable people on this site and if you found one near someone I'm sure they would be more than happy to look at for you and transportation can always be arranged.........IMHO
1965 mustang project
1965 Mustang Coupe
1965 ford Mustang v8
Or maybe look for a real nice 6 cylinder and convert it to a V8.